EU to adopt crypto sanctions against Russia

In the fifth round of economic and individual sanctions against the Russian Federation, the European Union will target crypto wallets and currencies to furtherly limit the country’s resources to wage war in Ukraine.

New measures are aimed at closing existing loopholes allowing Russia to evade sanctions. As such, a new ban on “providing high-value crypto-asset services to Russia” is supposed to help with that.

“Together with the four previous packages, these sanctions will further contribute to ramping up economic pressure on the Kremlin and cripple its ability to finance its invasion of Ukraine,” reads the statement by the European Commission.

Certain crypto-related targeted sanctions, such as barring crypto transactions, have already been imposed against certain individuals, but this is the first time the measure has been adopted at scale.

Additionally, the new package of sanctions includes:

• A full transaction ban and asset freeze on four Russian banks, which make up 23% of the bank market in the country.
• Ban on providing advice on trusts to wealthy Russians.
• Extending to all official EU currencies the prohibitions on the export of banknotes and on the sale of transferrable securities.

Ukraine’s vice prime minister, Mykhailo Fedorov, has previously urged crypto exchanges to block the addresses of Russian users,

At the same time, senators Elizabeth Warren and Mark Warne both suggested that Russia might use crypto to evade sanctions.

“Russia may use cryptocurrencies to circumvent the broad new sanctions it faces from the Biden administration and foreign governments. This could include the use of dark web marketplaces powered by cryptocurrencies to move funds and conduct transactions, crypto wallets and mixing services that allow sanctioned entities to transfer and hide their wealth, deployment of a digital ruble that would allow Russia to conduct foreign trade without converting its currency into dollars, and ransomware attacks that would allow Russian actors to recoup revenues lost to sanctions.”

A cryptocurrency exchange platform Coinbase has already blocked 25,000 wallet addresses related to Russia but has been reluctant to adopt the same measures to all Russian users, suggesting that they “believe everyone deserves access to basic financial services unless the law says otherwise."