Europe wants to ban all crypto transactions with Russia – FT

The European Union is seeking to ban all cryptocurrency transactions with Russia in an effort to stop Moscow from using assets outside the traditional banking system to evade sanctions. About this reports the Financial Times cited an internal document of the European Commission.

According to media reports, the agency proposed a radical measure instead of banning Russian copycat crypto organizations that split off from platforms that have already been sanctioned. The EU notes that such companies are used to facilitate trade in goods used in Russia's war against Ukraine.

The document indicates that any further inclusion of certain platforms in the sanctions lists may lead to the creation of new companies to circumvent the restrictions – instead, to ensure that the sanctions achieve the desired effect, the EU plans to ban cooperation with any providers of relevant services or use of any platform that allows the transfer and exchange of crypto assets and is registered in Russia, reports FT.

The European Commission's proposal is focused on preventing the development of successors to the Russian-linked Garantex crypto exchange, which was subject to US sanctions in 2022 as a platform favored by cybercriminals.

The possible restrictions are likely to be directed against the Russian payment platform A7, as well as the related cryptocurrency A7A5, a stablecoin pegged to the ruble.

The United States, the United Kingdom, and the European Union have also previously taken restrictive measures against this platform. However, in January, the specialized company Elliptic revealed that the total transaction volume of the aforementioned stablecoin exceeded $100 billion.

The European Commission has also proposed to impose sanctions on 20 banks and ban any transactions using the digital ruble backed by the Central Bank of Russia, the FT reports.

The media outlet adds that Brussels has proposed a ban on the export of certain dual-use goods to Kyrgyzstan, claiming that companies from the country have been selling banned items to Russia, such as machine tools and electronics used in weapons and drones.

This ban will be the first time that the anti-circumvention powers, which are the focus of the new 20th sanctions package, have been used.

The new restrictions would require unanimous support from EU member states. However, three of the bloc's 27 countries expressed doubts, according to three unnamed diplomats briefed on the discussions. One of them said they wanted more information before taking further steps.

Initially, the European Commission planned to agree on a new sanctions package by February 24, the fourth anniversary of the full-scale Russian invasion.

• In late January, Bloomberg's sources said the EU was considering a proposal to replace its price cap on Russian oil with a ban on maritime services as part of the new sanctions package.