The European Union (EU) has imposed a fifth round of sanctions against Russia as it continues its war of aggression in Ukraine.
The council has targeted crypto wallets as it aims to close potential loopholes in current restrictions that could have allowed Russians to circumvent sanctions and transfer funds.
In a press release, the EU member states have agreed to extend the ban on sending funds to crypto wallets. Such service providers in the region have been asked to impose sanctions and ban transactions from targeted users. However, the additional ban comes as regulators seek to strengthen existing measures and close loopholes.
Josep Borrell, Senior Representative for Foreign and Security Policy, said:
“These latest sanctions were adopted following the atrocities committed by the Russian armed forces in Bucha and elsewhere under Russian occupation. The purpose of our sanctions is to stop the reckless, inhuman and aggressive behavior of the Russian military and make it clear to decision-makers in the Kremlin that Russia’s illegal aggression They pay a heavy price.”
The set of targeted EU economic measures comes weeks after ECB President Christine Lagarde warned crypto companies against helping Russians dodge sanctions. A longtime critic of the industry, Lagarde asserts that cryptocurrencies are being used despite little evidence to support this claim.
A similar statement came from Wally Adeyemo, the 15th US Undersecretary of the Treasury, last week. He warned crypto platforms and financial institutions not to help Russia get around financial penalties.
While cryptocurrencies helped the Ukrainian government at a time of crisis as donations poured in, the spike in trading volume from Russia shortly after the outbreak of war led global regulators to believe that investors tycoons are using those assets to circumvent sanctions.
As the war continues, many have claimed that the crypto industry is being used by Russian entities to bypass the imposed sanctions. Even if some well-known experts in the field refute such claims, the accusations have not stopped. FTX CEO, Sam Bankman-Fried, has expressed his disappointment at the ongoing controversy.
Binance CEO – CZ also stated that no one is smart enough to use cryptocurrency to evade sanctions due to the transparency of blockchain technology.