The European Commission is actively working to implement a comprehensive ban on cryptocurrency transactions associated with Russia. This measure aims to enhance the enforcement of existing sanctions and is detailed in a recent internal document from the Commission. The proposal is included in the Commission’s 20th Sanctions Package, and it specifically targets cryptocurrency platforms, financial intermediaries, and payment channels that facilitate these types of transactions for Russia.
Historically, previous sanctions primarily focused on Russian-based entities. However, this new set of measures shifts the focus to disrupt the global infrastructure that enables these evasion activities, marking it as a more aggressive stance by the European Union towards digital assets.
The strategy includes identifying 20 additional Russian regional banks and implementing specific actions against crypto-related companies and platforms. The goal is to effectively eliminate avenues for circumventing sanctions. Concerns have been raised about the ability of sanctioned entities to quickly establish successor operations to bypass restrictions, exemplified by past incidents involving Garantex, a Moscow-linked exchange sanctioned in 2022.
This proposed ban also includes a total prohibition on transactions involving the digital ruble, which is a currency supported by the Russian central bank. In 2024, the EU had already taken significant actions, including disconnecting its entities from Russia’s similar financial messaging system and increasing sanctions on banks and crypto service providers that assist Moscow.
Additionally, late last year, the EU escalated its efforts by prohibiting transactions involving certain stablecoins and sanctioning the payment company Payeer. However, resistance has emerged from three EU member states regarding these latest proposed measures, which require unanimous approval. The Commission aims to finalize this initiative before the fourth anniversary of the invasion on February 24.