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European Union Announces Ban On Russian Crypto Assets And Services

In an October 6 statement by the European Union, it imposed new sanctions on Russia in response to Moscow’s annexation of four Ukrainian territories.

The statement marks, “The existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet (previously up to €10,000 was allowed).”

The European Union statement adds that the sanctions in place are an attempt to weaken Russia’s industrial capacity, considering how the country is dependent on importing affected industries such as IT consultancy, legal advisory, architecture, and engineering services.

Since Russia’s invasion of Ukraine in February, the country’s government, businesses, and individuals have been subjected to severe economic sanctions. On September 15, the US Treasury Department added 22 individuals and two Russian-based entities to its sanctions list, claiming they helped the government’s goals in Ukraine.

Recent Russian Legislation Promoted The Use Of Crypto

Since sanctions were imposed on the country, cryptocurrency has been used to assist refugees in a humanitarian crisis. However, some speculate that key Russian figures have also used it to evade sanctions.

The newly imposed European Union sanctions come just days after Russian officials approved the use of cryptocurrency for cross-border payments. Legislators described how to obtain cryptocurrency and its uses in the policy that approved such transactions.

The Russian Central Bank and the Ministry of Finance agreed on a bill to use cryptocurrency for cross-border settlements. Russian Deputy Finance Minister Alexei Moiseev announced the proposal at the time, saying that it aimed to provide Russians with access to crypto wallets. He also stated that the government made the decision to limit Russians’ opening crypto wallets outside of the country.

Moiseev provided his reasoning behind limiting non-Russian crypto entities in the country, stating, “Now that people are opening crypto wallets outside the Russian Federation, it is necessary to do this in Russia with entities supervised by the central bank, which are required to comply with Anti-Money Laundering and Know Your Customer requirements.”

Despite the Russian government imposing a bill on and promoting its citizens to use crypto while European Union sanctions are in place, reports state that officials vehemently oppose accepting cryptocurrency as legal tender and allowing cryptocurrency exchanges to continue operating in the country.

Sanctions Target More Than Crypto

Crypto was only one of the recent sanctions imposed by the European Union, alongside Russian steel imports, and imposed new restrictions on importing paper, cosmetics, cosmetics, and non-gold jewelry, among other things.

The European Union also confirmed a number of export restrictions, including those on coking coal and small arms. Additionally, the sanctions barred European Union nationals from serving on the boards of directors of some Russian state-owned enterprises.

The European Union closed its announcement by stating, “The EU’s sanctions against Russia are proving effective. They are damaging Russia’s ability to manufacture new weapons and repair existing ones, as well as hinder its transport of material.”

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