The eyes of the EU are blocked by foreign crypto services related to evading Russian sanctions

The European Commission has proposed sanctions on 20 non-EU entities, including crypto platforms, as part of a new package that could introduce the bloc’s first country-level ban on foreign crypto services linked to evading Russian sanctions.

According to the European Commission, the 21st package of proposed sanctions targets banks, oil traders, and cryptocurrency platforms that are suspected of providing services to authorized Russian individuals and organizations.

The President of the European Commission Ursula von der Leyen said that these measures are designed to close the remaining channels used to cross the existing borders.

Under the proposal, the transaction ban would be extended to non-EU listed entities. In addition, the commission wants the authority to ban crypto services from all non-EU jurisdictions if those countries host platforms that help Russian actors be allowed to continue operating.

“It will act as a strong deterrent to countries hosting platforms that help Russia evade sanctions,” von der Leyen said.

Crypto platforms are facing increasing sanctions scrutiny

The proposal comes as regulators on both sides of the Atlantic are increasing pressure on crypto infrastructure that they believe supports state-run and illegal financial networks.

Chainalysis reported that illegal cryptocurrency addresses will reach 154 billion dollars by 2025. The blockchain analytics firm also identified significant activity linked to Russia, citing nearly $93.3 billion in purchase volume involving the ruble-backed stablecoin A7A5, which it says represents the bulk of government-linked crypto activity.

Earlier this year, blockchain research firm Elliptic identified five crypto exchanges that it said were providing financial means used to circumvent sanctions while operating without the supervision of traditional banks.

Recent enforcement actions have already targeted several crypto businesses accused of supporting sanctioned networks. In May, the United Kingdom fined Huobi Global SA, an authority linked to HTX, for allegedly providing services on the A7 network linked to Russia. The UK government has imposed asset freezes, payment restrictions, internet service sanctions, and other measures against the company.

Elliptic said the UK action represents the first application of Regulation 17A against cryptoasset exchanges, expanding restrictions on banking relationships and payment processing involving selected entities.

Globally, the US Treasury Department in June designated Iranian cryptocurrency exchanges, Nobitex, Wallex, Bitpin, and Ramzinex, alleging that they helped authorized entities to access the digital asset ecosystem. Treasury officials said cryptocurrency services have become part of Iran’s efforts to move funds outside of traditional financial channels.

Russia prepares domestic crypto framework

While European authorities are moving towards stricter restrictions, Russia is preparing a comprehensive regulatory framework for cryptocurrency that is expected to be introduced in July.

The proposed rules would establish licensed domestic trading platforms, creating a regulated structure for local crypto activity as international scrutiny of Russian-linked digital asset flows continues to increase.

Apart from the crypto sector, the European Commission’s latest package also seeks to intensify pressure on Russia’s energy and trade sectors. The proposed measures include additional restrictions on oil tankers and the first sanctions targeting Russian fisheries.

“Our sanctions are biting hard and deep; they are weakening the economic foundations of Russia’s war effort,” von der Leyen added.