New Cryptocurrency Bans Against Russia Coming from the European Union – Leaked Information

The European Union plans to ban all cryptocurrency transactions linked to Russia in an effort to prevent Russia from circumventing sanctions by using assets outside the traditional banking system.

According to a European Commission document seen by the Financial Times, instead of individually listing “copycat” Russian crypto companies that have spun off from already sanctioned platforms, the Brussels government is proposing a much broader measure: banning all interaction with Russia-based crypto asset service providers.

The commission’s internal correspondence included the following statements:

“Listing individual crypto asset service providers will lead to the creation of new structures aimed at circumventing these lists. To ensure the sanctions achieve their purpose, it should be prohibited to interact with any crypto asset service provider based in Russia or to use platforms that enable crypto asset transfers and exchanges.”

This step is seen as part of the EU’s strategy to limit trade activities that could indirectly contribute to Russia’s war in Ukraine.

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The Commission also proposed banning the export of certain “dual-use” (usable for both civilian and military purposes) products to Kyrgyzstan. The EU alleges that some Kyrgyz companies are re-exporting banned products, such as machine tools and electronic equipment that can be used in weapons and drones, to Russia.

The proposed regulations aim to prevent the restructuring of crypto platforms, particularly those linked to Russia. In 2022, the US sanctioned the Russian crypto exchange Garantex, labeling it a “cybercriminals’ preferred exchange.” The new proposals reportedly also target the Russian payment platform A7 and the ruble-indexed stablecoin A7A5. The US, UK, and EU have previously imposed restrictive measures on companies linked to these entities. However, according to data published last month by blockchain analytics company Elliptic, the total trading volume of the stablecoin in question has exceeded $100 billion.

The commission also proposes banning all transactions involving the digital ruble, which is backed by the Central Bank of Russia.

The new sanctions require the approval of all 27 EU member states to come into effect. According to diplomats, three countries have expressed reservations about the package and are particularly requesting more information regarding the steps related to Kyrgyzstan.

The European Commission aimed to have the package adopted before February 24, the fourth anniversary of Russia’s invasion of Ukraine.

*This is not investment advice.

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