EU bans crypto providers supporting Russia’s defence-industrial base

The European Council has unveiled a 14th package of sanctions, targeting crypto providers established outside of Europe that support Russia’s defence-industrial base.

European leaders have adopted another package of sanctions designed to target “high-value sectors of the Russian economy, like energy, finance and trade, and make it ever more difficult to circumvent EU sanctions.”

In a Jun. 24 press release, the European Council revealed that the latest package includes restrictive measures on an “additional 116 individuals” as well as entities “responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.” Reuters notes in a report that following the latest action, the sanctions list now includes more than 2,200 entities.

“The 14th package of sanctions demonstrates our unity in supporting Ukraine and seeking to limit Russia’s criminal activities against Ukrainians, including efforts to circumvent EU measures.”

Josep Borrell, high representative of the EU for foreign affairs and security policy

Among multiple restrictive measures developed to “crack down on [sanctions] circumvention,” the European Council also introduced a ban on transactions targeting crypto providers “established outside of the EU, when these entities facilitate transactions that support Russia’s defence-industrial base through the export, supply, sale, transfer or transport towards Russia of dual-use goods and technology, sensitive items, battlefield goods, firearms and ammunition.”

The specifics of how European countries plan to monitor the industry for potential sanctions violations remain unclear, with some industry experts suggesting it will require extensive due diligence efforts.

This development comes a few months after the European Council and Parliament agreed on stricter regulations for crypto firms to enhance anti-money laundering (AML) measures in the sector. Starting from January, crypto firms must scrutinize their customers more closely, particularly for transactions of €1,000 or more. The aim is to ensure cryptocurrencies aren’t used for illegal activities or for sanctions evasion.