EU Bans Crypto Services To Russia Aimed At Closing Sanction Loopholes

EU bans crypto services to Russia aimed at closing sanction loopholes but the sanctions will include only high-value crypto-asset services so let’s read more in today’s latest cryptocurrency news.

The EU bans crypto services to Russia as it took more steps to sanction the country following the war in Ukraine. The  EU introduced a prohibition on providing high-value crypto-asset services to the country and it forms part of the fifth package of measures announced against Russia since the invasion of Ukraine started on February 24. the European Commission welcomed today’s agreement to adopt the fifth package of restrictive measures against Russia as a response to the brutal aggression against Ukraine. The new rule will contribute to the closing of potential loopholes according to the press release. The package’s other financial restrictions include a transaction ban and asset freeze on four Russian banks that are cut off from the markets.

The prohibition has been placed on providing financial advice to the wealthy Russian individuals to make it more difficult to store their wealth in the EU. In the wake of Russia’s invasion of Ukraine, a few other voices raised concerns about the potential use of crypto to evade economic sanctions. While cryptos cannot allow Russia to blunt the force of economic sanctions, some sanctioned entities can pivot to crypto as a helping hand.

This can be done in a few ways like Ransomware. Back in 2021, the ransomware industry generated more profits that Russian-affiliated criminals, and a recent UN report showed that North Korea funded its nuclear ambitions via crypto. The former FBI Agent and director of Threat Intelligence Crane Hassold said that cryptocurrencies are the main factor in today’s ransomware industry. Other methods include BTC mining and the use of non-compliant exchanges which is a strategy for which there’s already a precedent. In September last year, SUEX crypto exchange was sanctioned by the US Treasury Office of Foreign Assets Control for complicit cyber-related activity against American interests.

As recently reported, Changpeng Zhao, the Binance CEO says using crypto is a terrible option for evading sanctions. Cryptocurrencies have really come in handy to provide help for the Ukrainian government as well as other NGOs which managed to secure donations and help the country fight the war with Russia. However, the concerns were that the rich Russian oligarchs will try to slip past the sanctions imposed by the Western nations by using crypto. CZ thinks that nobody smart will choose crypto to do so.