As the conflict in Ukraine escalates, the European Union has launched a new round of economic sanctions against Russia and Belarus.
The European Union has expanded bans on depositing funds into crypto wallets to prevent Russia from avoiding possible sanctions via crypto. In addition, Russian and Belarusian companies and individuals will be prohibited from purchasing EU currency notes and transferable securities, such as stocks, bonds and other securities.
European Union imposes restrictions on crypto services in Russia
The European Commission announced on Friday the fifth package of economic sanctions against Russia and Belarus amid rising military aggression in Ukraine.
This time, the EU targeted cryptocurrency transactions used by Russian oligarchs and companies to evade sanctions. Crypto companies in Europe will be forced to restrict services to Russians and Belarusians, closing potential loopholes.
EU Foreign Policy Chief Josep Borrell said the following about the measures to be taken to pressure the Russian government to de-escalate:
“The purpose of our sanctions is to stop the reckless, inhuman and aggressive behavior of Russian troops and to make it clear to the decision makers in the Kremlin that their illegal aggression comes at a heavy cost.”
In addition to tightening crypto sanctions, the EU has banned Russian coal, a transaction ban and asset freeze on four Russian banks, a ban on imports and exports of Russia and Belarus to EU countries, and Russia’s participation in public contracts and European currency.
Challenges of Preventing Russian Crypto Exposure
Russian companies and oligarchs are accused of using cryptocurrencies, including Bitcoin, to evade sanctions and finance Russian military activities in Ukraine. Given the difficulty of effectively monitoring crypto transactions, limiting the use of cryptocurrencies by Russia has become a challenge for countries. Despite sanctions, Russia is experimenting with the crypto industry through non-compliant crypto exchanges and bitcoin mining.
Since Russia already has ample energy resources and a relatively cold climate, there has been a growing interest in building infrastructure for Bitcoin mining in the country lately. However, the country still lacks an efficient infrastructure and hence crypto mining in Russia is still quite limited.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.