In a press release dated 9 March, the European Commission has confirmed further targeted sanctions to block Russia from circumventing any rules.
And since crypto was considered a possible loophole to the international sanctions, it has now been included in the latest order. The development comes alongside the extension of Russia-like SWIFT prohibitions on Belarus.
Moving forward, the release has put crypto assets under the scope of “transferable securities” to implement existing financial restrictions.
The release stated, “These amendments create a closer alignment of EU sanctions regarding Russia and Belarus and will help to ensure even more effectively that Russian sanctions cannot be circumvented, including through Belarus.”
Clarifying the rules further, the EU has confirmed that loans and credit can be provided by any means, including crypto assets. However, they will clearly fall under “transferable securities” to implement these restrictions.
Meanwhile, a vote is awaited on draft regulations on cryptoassets in the European Parliament on 14 March, under the Markets in Crypto-assets (MiCA) proposal.
If we shift focus to Russia, many analysts had pointed out that the country might not be able to evade sanctions with crypto alone. Ari Redbord of TRM labs had told a media outlet last week that “Russia cannot use crypto to replace the hundreds of billions of dollars that could be potentially blocked or frozen.”
A report by Bloomberg has recently noted that Russian investors continue transacting in Bitcoin and other cryptos amid tightening rules. However, the overall volume doesn’t appear significant according to blockchain analytics firm Kaiko. Efficient Frontier’s Andrew Tu also told the website that more Russian retail investors are limiting fiat exposure to BTC, adding, “While technically, U.S. dollar sanctions probably cannot be realistically applied to USDT holders, I imagine that some people are simply taking additional precautions.”
Having said that, more and more crypto businesses are also implementing rules in line with the global sanctions in place. For instance, leading cryptocurrency exchanges in South Korea have placed prohibitions on Russian accounts.
Just yesterday, Japan’s central government also stated that it will bring cryptocurrency under the purview to stop Russia from evading economic sanctions.
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