European institutions are closing crypto loopholes for Russia with the latest package of penalties imposed by the EU over Moscow’s aggression against Ukraine. The new sanctions prohibit the provision of “high-value” crypto-asset services to Russian entities and residents.
EU limits Russian deposits in crypto wallets to €10,000
Expanding its sanctions in response to the Russian military assault on Ukraine, the European Union has once again targeted cryptocurrencies. On Friday, the European Commission, the executive body in Brussels, welcomed the fifth round of restrictions agreed by the EU Council. They were designed to “further contribute to increasing economic pressure on the Kremlin and cripple its ability to fund its invasion of Ukraine.”
The new Council regulation, published in the Official Journal of the European Union, bans the provision of “high-value” crypto-asset services to the Russian Federation. It applies to crypto wallet, account, or custody services for Russian citizens, other residents, and legal entities established in the country, if the total value of the digital funds exceeds €10,000 (close to $11,000). The EU emphasized:
Given the seriousness of the situation and in response to Russia’s military aggression against Ukraine, new restrictive measures should be introduced. In particular, the deposit ban should be extended to crypto-wallets.
Similarly, the EU limits fiat deposits by Russian individuals and organizations but the threshold is much higher, at €100,000. The measures, intended to close various other loopholes, also ban the sale of banknotes and transferrable securities denominated in the euro or other official currencies of the EU member states to Russia and Belarus, Moscow’s closest ally, or to any person or entity registered there.
The financial restrictions also include the freezing of assets and a total ban on transactions of four Russian banks representing a quarter of the country’s banking sector. At the end of February, Western allies, including EU members and institutions, excluded “certain Russian banks” from the SWIFT messaging network for interbank payments. The European Commission and the Council have noted that Russian financial institutions are now “completely cut off from EU markets”.
