New EU Sanctions Package: Impact on Russian Cryptocurrency Services

The new package of sanctions prohibits any transactions with Russian banks and crypto services, as well as with organizations from third countries that facilitate transactions in the interests of Russia. This restriction is aimed at preventing circumvention of sanctions and increasing financial pressure on the Russian economy.

“Today’s package significantly strengthens our financial sanctions by banning European banks outside Russia from using the SPFS financial messaging system, which is the Russian equivalent of SWIFT,” the regulator said in a statement.

The Council of Europe will receive the authority to compile a list of banks from third countries connected to the Russian SPFS system. These banks will be prohibited from doing business with EU operators. This measure is aimed at preventing the use of alternative financial systems to circumvent sanctions.

In March 2024, the United States imposed sanctions against Russian operators of digital financial assets (DFAs), crypto exchangers and a number of blockchain services. The companies Atomize, Lighthouse, Distributed Registry Systems, Web3 Tech, B-Crypto and others were sanctioned. Experts interviewed by RBC-Crypto believe that these measures were taken in response to the legalization of digital financial services for international payments in Russia.

At the end of May, Bloomberg reported that Russian commodity companies began using cryptocurrency, in particular the USDT stablecoin from Tether, for settlements. This became possible due to the easing of some financial restrictions and the desire of companies to avoid sanctions pressure on traditional banking operations.

The European Union has already taken steps to limit the use of cryptocurrencies by Russians. In October 2022, as part of the eighth package of sanctions, a ban was introduced on the use of crypto-wallets whose operators are registered in Europe. This led to the blocking of Russian accounts on a number of European crypto-services, significantly limiting the ability of Russians to use cryptocurrencies in international payments.

The new package of EU sanctions is aimed at increasing financial pressure on Russia and preventing sanctions from being circumvented through cryptocurrency services. The restrictions apply not only to Russian operators, but also to their partners in third countries, which emphasizes the seriousness of the EU's intentions in combating financial flows supporting the Russian economy. In the context of a tightening sanctions regime, cryptocurrency transactions are becoming increasingly complex and risky for all participants.