The EU Bans Crypto Services for Russians in New Sanctions over Ukraine

The EU Bans Crypto Services for Russians in New Sanctions over Ukraine

The EU has approved a range of crypto-related services in the latest round of sanctions on Russia. The measures are part of an expected tightening of economic and financial restrictions in response to Moscow’s decision to annex Ukrainian territories.

EU Bans All Crypto Wallet and Custody Services for Russians

The Council of the European Union has announced new sanctions against Russia against the backdrop of the deepening military conflict in Ukraine. The penalties are expected to hurt the Russian government and economy after Moscow took steps to annex the Ukrainian regions of Donetsk, Luhansk, Zaporizhzhia, and Kherson.

The High Representative for Foreign Affairs and Security Policy of the EU, Josep Borrell, said that the sanctions are in response to the latest escalation with the "fake referenda" in these four oblasts.

Russian citizens and businesses are likely to be impacted, including those that deal with cryptocurrencies. The new measures include a full ban on the provision of wallet, account, or custody services for crypto assets to Russian persons and residents. This is regardless of the value of these assets, according to the eighth package of sanctions imposed by Brussels.

When the EU approved its fifth round of such measures, the Council prohibited only the provision of "high-value" crypto-asset services to Russians and organizations registered in their country. The ban applied to digital funds exceeding €10,000 (close to USD 11,000 at the time).

New European Sanctions to Impact Russian Imports and Exports

While the earlier restrictions were largely intended to limit the transfer of wealth through digital assets and plug loopholes in crypto activities, a recent report revealed that pro-Russian groups have been actively using cryptocurrency, often in small transactions, to fund paramilitary operations in Ukraine. The research data reveals that pro-Russian groups have raised USD 400,000 in crypto since the start of the invasion in late February. Russian authorities have also been working to allow businesses to employ crypto payments for international settlements.

With the latest move, the EU also bans the provision of IT consulting and legal advisory services to Russia, as well as architectural and engineering services. Russian imports and exports have been targeted, too, including the maritime transport of crude oil and petroleum products to third countries. The provision of related services will be allowed only if these have been purchased at or below a pre-established price cap, which is yet to be determined.

Among the other measures is a ban on EU nationals holding any posts on the governing bodies of some Russian state-owned or government-controlled entities. The Council also decided to broaden the criteria under which people can be designated as facilitating the circumvention of restrictions imposed by the European Union. The European Commission, the executive body in Brussels, welcomed the latest sanctions package.