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The EU bans the provision of “high-quality crypto-asset services” to Russia

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The Council of the European Union has cut off Russians from certain cryptocurrency services as part of a package of restrictive measures against “Russian President Vladimir Putin’s brutal aggression against Ukraine and its people.”

In an announcement on Friday, the EU Council said it would close potential loopholes in the use of digital assets for Russian companies and individuals to circumvent sanctions with a “ban on providing high-quality crypto-asset services” to the country. The action was one of three financial measures proposed by the European Commission, alongside bans on transactions and asset freezes linked to four Russian banks and a “ban on advising wealthy Russians on trusts”.

Russian Prime Minister Mikhail Mishustin claimed on Thursday that Russians own more than $130 billion in crypto assets — an amount reportedly comparable to the country’s gold holdings, which were valued at about $140 billion in March 2022 were appreciated. However, it is unclear if the Russian nationals and banks have been named in sanctions from both the United States and the European Union trying to use crypto to circumvent these restrictions, the narrative remains among many lawmakers and regulators.

The European Commission has included crypto assets in its sanctions against Russia and Belarus in response to the invasion of Ukraine announced in March. In the United States, the Treasury Department warned businesses and individuals against allowing crypto transactions sent to certain Russian nationals and banks.

Related: European “MiCA” regulation on digital assets: where do we stand?

While lawmakers continue to hint at crypto’s potential role in circumventing sanctions, oil and gas exports from Russia to EU member states remain a major source of revenue for the country, which is currently attacking Ukraine. The EU Council’s restrictive package of measures included an import ban on Russian coal but made no mention of oil or gas. The United States Congress passed legislation on Thursday to ban oil and gas imports from Russia, which account for about 2% of US supply, compared to an average of 20% across Europe.