EU bans high-value crypto services to Russians to cover ‘loopholes’Vish Gainon April 8, 2022 at 13:50 Silicon RepublicSilicon Republic

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The EU has issued a fifth round of sanctions on Russia for its invasion of Ukraine, which includes a ban on providing high-value crypto services to Russians to “close potential loopholes” in previous sanctions.

Agreed today (8 April), the decision made by the EU Council is a response to fears that Russians are circumventing existing sanctions by moving money abroad using crypto wallets. The new move will effectively ban all EU-based crypto exchanges and wallets from providing services to Russia.

In late March, European Central Bank chief Christine Lagarde claimed at a virtual event that Russians were converting roubles into cryptocurrencies and stablecoins to evade harsh economic sanctions imposed by the EU.

“When you see the volumes of roubles into stable, into crypto, at the moment it is the highest level that we have seen since maybe 2021,” Bloomberg quoted her saying.

Concerns that Russians could use crypto exchanges and wallets to avoid sanctions have been around since the first rounds of sanctions were being imposed on the country by the EU, US and other nations.

On 1 March, the US Treasury warned against US-based exchanges facilitating “deceptive or structured transactions or dealings to circumvent any United States sanctions, including the use of digital currencies or assets or the use of physical assets”.

The fifth EU sanctions package against Russia also imposes a full transaction ban and asset freeze on four Russian banks – representing 23pc of market share in the country’s banking sector – which are now totally cut off from EU markets.

It also prohibits trusts based in the EU from providing services and giving advice to wealthy Russians to prevent them from storing wealth in the bloc.

“These sanctions will further contribute to ramping up economic pressure on the Kremlin and cripple its ability to finance its invasion of Ukraine,” the Commission wrote in a statement. “These measures are broader and sharper, so that they cut even deeper into the Russian economy.”

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