Cryptocurrency owners in Russia face EU sanctions over the war in Ukraine

The European Union has imposed a new 14th package of sanctions against the terrorist state of the Russian Federation, aimed at further restricting its financial sector and ability to do business on the global stage. Among other things, the sanctions include Russian banks, the SPFS financial messaging system, and cryptocurrency services that may be linked to the aggressor country’s defense industry.

According to the new restrictions, European banks are prohibited from using the SPFS system, which is the Russian equivalent of the international SWIFT system. Third-country banks connected to SPFS lose the ability to do business with EU companies. The Council of Europe will compile a list of banks subject to these restrictions. The EU regulator said in a statement: «These measures significantly strengthen our financial sanctions by prohibiting European banks outside Russia from using the SPFS, which will make it more difficult for Russia to conduct foreign trade.»

In addition to banks, the EU has also targeted the occupiers' cryptocurrency sector. In March of this year, the United States imposed sanctions on a number of Russian operators of digital financial assets, crypto-exchange services and blockchain services. The sanctions list includes such companies as Lighthouse, Atomize, B-Crypto, Web3 Tech, Distributed Ledger Systems, and others.

Experts attribute these steps to the legalization of CFAs for international payments in Russia. There is also information that Russian commodity companies have started using cryptocurrencies, in particular the USDT stablecoin, for payments. This has also attracted the attention of regulators.

As a reminder, in October 2022, the European Union imposed restrictions on the use of cryptocurrency transactions for Russians, which led to the blocking of Russian accounts on some European trading exchanges. It is noted that the new package of sanctions may lead to more severe restrictions on the cryptocurrency services of the terrorist state.

Earlier, we also informed that the terrorist state of Russia and the state sponsor of terrorism, Iran, are looking for solutions that will help facilitate trade between the countries, one of which is cryptocurrencies. They are exploring the use of central bank digital currencies (CBDCs) and other digital financial assets.