EU Seals ‘Potential Loopholes’ By Banning Russia’s High-Value Crypto Services

The European Union has announced its latest round of sanctions to ramp up economic pressure on Putin’s regime in response to its invasion of Ukraine. The EU was expanding the prohibition on Russia’s banks, crypto wallets and crypto services, currencies and trusts in a bid to close any potential loopholes.

The decision was made as it seemed that Russia might be using crypto-assets as a method to withstand the financial embargoes imposed by the west.

The press statement of the EU reads: “A prohibition on providing high-value crypto-asset services to Russia. This will contribute to closing potential loopholes<…>A prohibition on providing advice on trusts to wealthy Russians, making it more difficult for them to store their wealth in the EU”.

The council of the EU revealed that it was underway to adopt more extensive sanctions on Russia after the country’s atrocities in Bucha.

As a result of the armed conflict, many EU-based crypto exchanges were forced to prohibit transactions from targeted people in Russia. However, concerns emerged that some loopholes exist, as acknowledged by Christine Lagarde, President of the European Central Bank.

EU imposes more financial sanctions on Russia.

The EU is trying to impose more financial sanctions on Russia. Source: Lefteast

Apart from cryptocurrency, the EU has prohibited the sales of banknotes and transferrable assets such as shares denominated in any of the EU member states’ official currencies to Russia and Belarus.

The latest embargoes reconfirmed the complete transaction restriction on four Russian banks, including VTB, which account for 23% of the country’s banking sector.

Contrary to EU concerns, Russia’s Prime Minister Mikhail Mishustin has emphasised that cryptocurrency usage for settlement purposes remains forbidden. He also stated that the government completely supported the Central Bank’s position that cryptocurrencies are not authorised payment options in the nation.

With the escalation of sanctions on Russia, the International Monetary Fund has issued a warning about the ramifications for the world financial system. The IMF said that the penalties might increase the usage of digital assets and undermine the dollar’s dominance.