Brussels tests a full crypto blockade on Russia as sanctions evasion goes on-chain

The EU Commission is circulating a proposal to ban all cryptocurrency transactions linked to Russia, arguing that Moscow increasingly uses crypto rails, stablecoins and alternative payment networks to route value outside traditional banking and around sanctions. The initiative is framed as part of the EU’s 20th sanctions package and would require unanimous member-state approval.

Key points

• From “service bans” to “transaction bans”: the EU already restricts crypto-asset wallet/account/custody services for Russian persons/entities under the Russia sanctions regime; the new move aims to sever the entire transaction pipeline, not just specific providers.
• “Heirs problem”: rather than chasing individual exchanges that can rebrand or relocate (e.g., successor structures to Garantex), the concept targets any Russia-linked crypto activity.
• Named rails: the draft reportedly flags the A7 platform and its stablecoin A7A5, and also seeks to prohibit transactions involving the planned digital rouble.
• Anti-circumvention expansion: the package also leans into third-country chokepoints (e.g., measures tied to Kyrgyzstan routes) and adds further banks/actors to listings.

What this means for CASPs, fintechs, and banks

If adopted, compliance programs would need to treat “Russia nexus” crypto flows like a hard sanctions perimeter: tighter customer/counterparty screening, stronger geo/IP controls, enhanced wallet risk scoring, and escalation rules for indirect exposure (beneficial ownership, intermediaries, OTC desks, payment hubs, stablecoin issuers).

Actionable insight

Start mapping your Russia-touchpoints now (customers, counterparties, wallets, liquidity venues, stablecoin rails). If your controls still assume “named entity” sanctions only, you’re already behind the enforcement curve.

Call for Information

Have you seen Russia-linked on/off-ramps, stablecoin corridors, or “shadow PayFac” structures used to bypass EU restrictions? Share evidence via Whistle42 (anonymity respected).