The European Union (EU) has imposed the fifth round of sanctions against Russia in light of its continuing war against Ukraine.
The council has targeted cryptocurrency wallets as it aims to close potential loopholes in existing restrictions that could allow Russians to circumvent sanctions and move money.
Fifth Round of Sanctions Against Russia
In a press release, the member states of the EU have agreed to extend the prohibition of deposits to crypto-wallets. Such service providers in the region were already required to impose sanctions and ban transactions from targeted users. However, the additional prohibition comes as regulators look to strengthen existing measures and close loopholes.
Josep Borrell, High Representative for Foreign Affairs and Security Policy, stated,
“These latest sanctions were adopted following the atrocities committed by Russian armed forces in Bucha and other places under Russian occupation. The aim of our sanctions is to stop the reckless, inhuman, and aggressive behavior of the Russian troops and make clear to the decision-makers in the Kremlin that their illegal aggression comes at a heavy cost.”
The series of targeted economic measures by the EU comes weeks after ECB President Christine Lagarde warned cryptocurrency firms against helping Russians dodge sanctions. A long-time critic of the industry, Lagarde asserted that cryptocurrencies were being used despite little evidence to back the claim.
A similar statement came from Wally Adeyemo, the 15th United States Deputy Secretary of the Treasury, last week. He warned crypto platforms and financial institutions not to help Russia bypass financial penalties.
Arguments By Crypto Players on Sanction Evasion
While cryptocurrencies have helped the Ukrainian government at a time of crisis as donations poured, the skyrocketing trading volume from Russia just after the war broke out led global regulatory authorities to believe that oligarchs are using such assets to circumvent the sanctions.
As the war continued, many have claimed that the cryptocurrency industry is being used by Russian entities to bypass the sanctions imposed. Even as several prominent experts in the sector refuted such claims, the allegations did not stop. FTX CEO Sam Bankman-Fried, for one, expressed his frustration about the ongoing argument.
Binance CEO CZ also stated that nobody smart would use crypto to evade sanctions due to the transparency of blockchain tech.
Featured Image Courtesy of VoteWatch Europe