EU’s New Move Targets Russian Crypto Wallets

The EU Council has decided to impose another ban on Russia, bringing the total number of sanctions against the Russian Federation to five. Its latest will tighten up previous sanctions on Russian-related wallets. As well as traditional accounts linked to Russia and Belarus.

What the New Sanction Entails

According to a press release issued by the EU, the current package features five items. The package focuses on coal and fossil fuels, access to EU ports, road transportation, exportation bans, as well as financing.

#EU approves new sanctions against #Russia

The EU's new coal ban is estimated to cost $4.4 billion a year. The export bans on arms and other products are valued at some 10 billion euros. The nations also approved a ban on Russian ships entering ports. pic.twitter.com/W08YpQ0joi

— TRT World Forum (@trtworldforum) April 9, 2022

In terms of financing, several economic measures have been implemented to cut off Russia from European markets. However, the EU believes previous sanction requirements allowed for certain escape clauses which the new measures correct. As a result, its recent adjustment reinforces the prohibition of all financial assistance to the Russian government. This also includes a prohibition on deposits to Russian crypto wallets.

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The sanction adjustment comes after Pavel Zavalny – chairman of Russia’s Congressional energy committee – enthused about Bitcoin trades. The Russian chairman expressed that the country was open to receiving BTC for natural gas exports. Shortly after Pavel’s comments, ECB President Christine Lagarde warned that cryptocurrencies might jeopardize the EU’s efforts to penalize Russia.

There are also concerns that despite the risk of volatility, Bitcoin could be a safe choice for sanctioned Russian oligarchs.  Nigel Kushner, CEO of W Legal, expects the limitations to further restrict Russia’s financial backing and access to war resources.

Previous Sanctions

The previous sanction, imposed last month, added 15 individuals and 9 businesses to the sanction list, including Roman Abramovich, owner of football club Chelsea FC. This totals 877 individuals and 62 entities on the list.

In addition, four large Russian banks with a combined market share of more than 20% in the country’s banking sector face a complete transaction embargo. Following a forced withdrawal from the SWIFT system, the banks could face an asset freeze, effectively cutting them off from EU markets.

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To tackle the country’s stifling financial state, President Vladimir Putin announced a directive on March 31. Putin’s directive required Russian gas customers to open a special account in Russian banks. This means Russia’s trade partners can pay for their deliveries in Russian Rubles, thus circumventing SWIFT’s stipulations. So far, however, the United States has placed an explicit ban on the import of Russian oil and gas.