Europe, Russia, Digital Asset Transaction

EU bans all digital asset transactions to Russia

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The European Union (EU) has now banned all digital asset transactions to Russia in its latest round of sanctions against the Vladimir Putin government.

The recent announcement was the EU’s eighth package of sanctions against Russia. In its press release, the 27-member bloc said the move is in response to “Russia’s continued escalation and illegal war against Ukraine, including by illegally annexing Ukrainian territory based on sham ‘referenda,’ mobilising additional troops, and issuing open nuclear threats.”

The sanctions target imports, exports, oil price caps, and financial and IT consultancy services. Among these is a new restriction on European entities against transacting digital assets with Russian nationals or entities.

“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 EU stated in its announcement.

Reports of the impending sanction tightening had been making the rounds in the past two weeks. They followed annexation referenda held by President Putin’s government in four Ukrainian regions, which, according to Russia, voted out of Ukraine.

The EU denounced these “sham” referenda, with European Commission President Ursula von der Leyen telling the media, “The sham referenda organized in the territories that Russia occupied are an illegal attempt to grab land and to change international borders by force.”

Digital assets were among the areas the EU was seeking to tighten its sanctions on. According to one official, despite the €10,000 cap previously imposed, the bloc “realized that transactions were still going on in some scale. We wanted to make sure that these services are not rendered any more” by entities operating from Europe.

The new ban already has virtual asset service providers (VASPs) scrambling to cut off Russian users. Dapper Labs, the company behind NBA Top Shot and Cryptokitties, is among the first to adhere to the new sanctions.

“Our payment processing and stored value service partner is subject to EU regulations and has directed us to take action on all accounts held by those impacted by the Oct. 6 restrictions, consistent with EU law,” a notice on the company’s website reads.

The new sanctions will be a blow to Russian companies, which, according to the country’s Minister of Finance Ivan Chebeskov, have turned to digital assets to circumvent sanctions.

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