EU Tightens Sanctions on Russia including Crypto

Sanctions continue to tighten on Russia as the war drags on with the Ukrainians rapidly regaining their territory. Russia recently held sham elections in several provinces in an attempt to show that inhabitants want to be a part of Russia. While President Putin said he was “surprised” by the results that indicated a vast majority wanted to leave Ukraine – no one else was surprised as the outcome was predetermined by the invaders.

Yesterday, the European Union announced an 8th package of sanctions against Russia. These sanctions included additional import restrictions, actions against state-owned enterprises, targeting high-ranking and military officials, and more. In the mix was a tightening of crypto transactions.

To quote the EU:

The existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet (previously up to €10,000 was allowed).

The package widens the scope of services that can no longer be provided to the government of Russia or legal persons established in Russia: these now include IT consultancy, legal advisory, architecture, and engineering services. These are significant as they will potentially weaken Russia’s industrial capacity because it is highly dependent on importing these services.

Meanwhile, Russia continues to accept Bitcoin and crypto as alternative financial paths. It has been widely reported that the Russian Ministry of Finance will allow any Russian firm to accept Bitcoin and other cryptos for trade purposes.

Tass reported that Binance, a global crypto exchange that continues to serve Russian individuals (non-sanctioned), has not received any official confirmation about a halt in withdrawing funds.

This past September the Central Bank of Russia revealed its intent to start testing a digital Ruble with clients beginning this coming April.

Central Bank of Russia Governor Elvira Nabiullina stated:

“We are now testing the digital ruble with fifteen banks, this is really a test mode on how to open wallets on the digital ruble platform, how to make transfers between customers, how to pay for goods and services, including via QR codes.”

RT has reported that Tether (USDT) a dollar-based stablecoin, has emerged as one of the most popular methods for Russians to pull money out of Russia.

 

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