A number of crypto-related services are targeted in the latest round of sanctions against Russia approved by the EU. The measures are part of an expected tightening of economic and financial restrictions in the wake of Moscow’s decision to annex Ukrainian territory.
EU Council adopts total ban on crypto wallets and custody services for Russians
The Council of the European Union has announced new sanctions against Russia against the backdrop of deepening military conflict in Ukraine. The penalties, which are expected to hit the Russian government and economy, will be applied following Moscow’s decision to annex the Ukrainian provinces of Donetsk, Luhansk, Zaporizhia, and Kherson.
EU High Representative for Foreign Affairs and Security Policy Josep Borel stressed in a statement that the sanctions are a response to the latest escalation by “fake referenda” in these four provinces. Russian individuals and entities that played a role in their organization will be specifically targeted.
Other Russian citizens and companies will also be hit, including those dealing in cryptocurrencies. The new measures include a total ban on the provision of wallets, accounts, or custodial services for crypto assets to persons or residents of Russia. This is regardless of the value of these assets, according to the eighth round of sanctions imposed by Brussels.
This spring, when the EU approved the fifth round of such measures, the Council banned only the provision of “high-value” crypto asset services to Russians and organizations registered in that country. This ban applied to digital funds in excess of €10,000 (nearly $11,000 at the time).
New European Sanctions Hit Russian Imports and Exports
While previous restrictions were intended to limit wealth transfer through digital assets and close other loopholes in the crypto space, recent reports indicate that pro-Russian groups have been actively using cryptocurrencies to finance Ukrainian paramilitary operations, often in small transactions. They have raised $400,000 in crypto since the invasion began in late February, according to the study. In addition, Russian authorities are working to enable companies to adopt crypto payments for international payments.
In its latest move, the EU has also banned the provision of IT consultancy and legal advisory services to Russia, as well as architectural and engineering services. Russian imports and exports, including maritime transport of crude oil and petroleum products to third countries, are also covered. The provision of related services is permitted only if they are purchased at or below a pre-set price ceiling (price to be determined).
Other measures include prohibiting EU member states from holding management positions in Russian state-owned and government-owned companies. The Council also decided to expand the criteria for designation as a person who facilitates circumvention of EU-imposed restrictions. The European Commission, Brussels’ executive body, welcomed the latest sanctions.
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