EU forbids the provision of high-value crypto services to Russia

As another sanction imposed upon Russia, the Council of the European Union has recently announced that Russian entities and citizens are banned from using high-value crypto services. This is a part of the fifth round of restrictive measures against President Vladimir Putin’s military invasion of Ukraine, debilitating its capacity to execute Russia’s plans. 

According to the European Commission, this latest sanction will play a part in closing potential discrepancies in prevailing restrictions. The proposal was announced alongside the freezing of assets linked to four Russian banks and coal imports, as well as providing advice on trusts to Russian oligarchs. 

‘In view of the gravity of the situation, and in response to Russia’s military aggression against Ukraine, it is appropriate to introduce further restrictive measures. In particular, it is appropriate to extend the prohibition on deposits to crypto wallets’, stated EU in the Official Journal of the European Union.

In addition, the EU is also prohibiting the purchasing of transferable securities and banknotes, alongside cutting off the Russian banks from the international bank messaging system SWIFT. 

This is not the first time the EU has expressed its stand on cryptocurrencies as a threat to imposing Russian sanctions. On March 23, 2022, European Central Bank (ECB) Chief Christine Lagarde stated that crypto service providers may be an accessory to evading prohibitions against the country during the Bank for International Settlements’ Innovation Summit.

‘So is it a threat? Yes. Has it … been a threat in the past? Yes, because when you look at a lot of the dubious transactions that are taking place, a lot of the criminal activities payments that are taking place, very often you find some crypto assets’, said Lagarde.

While the EU Council and US lawmakers have been focusing on crypto to weaken Russia’s financial capacity to fund its invasion, gas and oil exports remain a major source of revenue for the invader. The United States Congress, however, passed a bill on April 7 aiming to ban oil and gas imports from Russia, which makes up 8% of US oil imports.

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