The 21st package of European Union sanctions against Russia, passed on July 23, apart from tightening the screws on the Russian ruble stablecoin network and the institutions enabling it, also introduces the possibility of banning crypto transactions with countries aiding Russia in evading imposed restrictions.
Key Takeaways
The EU approved its 21st sanctions package, extending transaction bans to 14 offshore crypto platforms.New rules ban Russians and Belarusians from owning or holding posts in EU-based MiCA crypto providers.A new provision lets the EU impose blanket crypto transaction bans on countries aiding Russian evasion.But apart from these, two new provisions seek to thwart Russians’ ability to leverage crypto to aid the war effort. The first one, which becomes effective on August 25, extends a prohibition on Russians and Belarusians from owning or controlling, or holding positions in EU-based cryptocurrency service providers.
The second provision establishes a crypto transaction ban on entire countries where service providers fail to comply with these sanctions, giving these extraterritorial status.
Article 5bc of amended Regulation 833/2014 states that “it shall be prohibited to engage, directly or indirectly, in any transaction with a legal person, entity or body that is an entity providing crypto-asset services or is a platform enabling the exchange or transfer of crypto-assets and is established in a third country.”
Furthermore, regulations specify that this nation list, currently empty, “shall include only third countries that have been identified by the Council as having systematically and persistently failed to prevent the provision of crypto-asset services, or to prevent platforms exchanging or transferring crypto-assets.”
For Nick Turner, an economic sanctions expert, this shift means the EU is leaning into secondary sanctions after having a long history of opposing them. He also stressed that this might cause legal conflicts in jurisdictions where regulation conflicts with EU sanctions.
