The European Union has expanded its sanctions against Russia and added more restrictions on crypto wallets and related services. According to a press release, the European Commission implemented an eight-pack on the Russian Federation due to its conflict with Ukraine.
The sanctions are aimed at negatively affecting key areas of Russian infrastructure and preventing them from continuing their invasion of Ukraine. The Commission claims that the conflict has turned into an “illegal war against Ukraine”.
In addition to its military infrastructure and ability to mobilize troops in Ukraine, the Commission has focused on Russia’s ability to generate revenue. The EU will impose a ban of more than 7 billion euros and restrictions on exports to attack the financial and technological capabilities of the country.
The new sanctions will deprive the Russian Federation of “key complex” technological components and European economic services. It includes banning European citizens from holding positions in certain Russian companies and supplying the country with specific goods and equipment. The Commission stated:
The geopolitical, economic and financial implications of Russia’s continued aggression are clear, as the war has disrupted global commodity markets, particularly agri-food and energy.
Europe takes a hit at Russia through crypto sanctions
The new sanctions have been implemented following the annexation of Ukrainian territory to the Russian Federation. The nation led by Vladimir Putin held referendums that allowed people to vote for the integration of Luhansk, Kherson, Zaporizhzhia and Donetsk into Russian territory.
The Commission classified this action as an “illegal annexation” calling the voting process a “sham”. In this regard, the new sanctions will test Russia’s ability to evade financial pressure.
The European Commission announced the ban on crypto assets, member countries must “ban” all crypto wallets, users and custody services in that country. The old sanctions allowed people from European countries to make crypto wallet transactions in Russia with amounts of up to 10,000 euros.
The new sanctions have been designed to expand the scope of services and people who will not be able to interact with European entities. In addition to cryptographic and digital assets, the Commission has prevented IT consultancy, legal advisers and others from providing support to the Federation.
On the new cryptographic and technological restriction, the Commission said:
They are important as they will potentially weaken Russia’s industrial capacity because it is heavily dependent on the import of these services.
However, many are left wondering how the Commission or European entities will be able to enforce these restrictions. Unlike a computer or import service, transactions on the blockchain may not be associated with a person.
At most, crypto exchanges and other related companies will be able to block and prevent Russian users from joining their platforms. The average person will still be able to send and receive digital assets from Russian people or people in the conflict zone.
As reported by Bitcoinist, donations of crypto and digital assets have been critical in the Ukraine-Russia conflict. People from all over the world have sent funds to support the Ukrainians, allowing the country to purchase critical equipment.
In addition, people in the affected areas, some of which could be considered part of Russia, used cryptography to continue with their daily lives. Therefore, the new EU sanctions could pose a problem for the small, not the main players in Putin’s government who still have access to various tools to avoid the sanctions.