The United States urges Japan to increase the pressure on crypto miner with connections to Russia

The United States has asked Japan to increase the pressure on the cryptocurrency exchanges and miners of the country, and asked them to cancel relationships with Russia in order to further insulate the country from the outside world.

The request of US diplomats was aimed at several of the 31 officially licensed crypto exchanges of Japan, who are still running in Russia, according to people who are close to the situation.

The diplomats asked Tokyo to concentrate on the cessation of the cryptocurrency mining operations in the Irkutsk region in Siberia, said two people familiar with the matter.

The area is preferred for crypto mining operations, since its relatively low temperatures require less cooling and because cheap electricity is available from hydropower.

In response to this, representatives of the Japanese Financial Service Authority once again demanded that the Japanese stock exchanges, which supervise them, cancel all existing relationships, according to people who are close to three stock exchanges.

When asked about the application, the FSA and the US message in Tokyo rejected a statement. The US State Department said Washington and its allies are "united in our determination to hold Russia accountable for the war against Ukraine". "We will continue to evaluate the effects of our measures and are ready to take further measures," said a spokesman for the Foreign Ministry.

Since Russia's invasion into Ukraine, the government of Prime Minister Fumio Kishida has been trying to remain in step with the United States and its allies as far as the sanctions against President Vladimir Putin's regime and the efforts to minimize Japanese business in Russia.

Washington's decision to provide information about possible Japanese crypto mining operations in Russia was part of the efforts to maintain the pressure on Putin while the war continued in Ukraine, said people who were informed about the matter.

The Japanese FSA, which regulates the country's licensed cryptocurrency exchange, quickly reacted to the Russian invasion in Ukraine.

On March 14th, the FSA officially asked the stock exchanges to monitor all accounts or transactions that affect the movement of assets of persons or organizations under sanctions.

The application followed an urgent change in the Japanese foreign exchange and foreign trade law, which brought cryptocurrencies and other digital assets under its roof and strengthened the government's powers to gradually contain their electricity.

The FSA's communication did not directly ask the stock exchanges to close all business in Russia, but some companies interpreted this, and several men this month stop working in the country, so people who are close to the situation.

Decurret, a cryptocurrency exchange, said that after the invasion and announcement of the FSA, she decided to hire her activities in Russia.

Many of the stock exchanges contacted by the Financial Times stated that they currently have no business in Russia. A senior employee on a stock exchange said that they knew from at least one mining company that had demolished his relationships with Russia in June after the US request.

Some exchanges and crypto mining companies have built up a complex network of subsidiaries in order to continue to work with their Russian operations, an assertion that was also raised by US diplomats said people who are close to the situation.

The former head of an exchange that spoke on the condition of anonymity confirmed that Japanese crypto exchanges have recently come across increased pressure to shift any mining or back office operations from Russia.

But the person added that she knew from at least one exchange that had decided to maintain her business there, to avoid regulation by founding a mailbox company in Singapore and led payments through this company.

Additional reporting from Felicia Schwartz in Washington