The European Union (EU), according to a press release by the executive branch of the 27-member state political and economic union, the European Commission, is ensuring that Russian elites and unable to bypass the sanctions imposed on them using cryptocurrencies.
This statement was made when the EU released details of a fourth package of restrictive measures against Russia. The statement reads, “Third, we are making sure that the Russian state and its elites cannot use crypto assets to circumvent the sanctions. We will stop the group close to Putin and the architects of his war from using these assets to grow and transfer their wealth.”
The fourth package of sanctions includes denying Russia’s status of most-favoured-nation, banning the export of any EU luxury goods to Russia, prohibiting the import of key goods in the iron and steel sector from Russia and banning new European investments across into the Russian energy sector.
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What you should know
- This move comes after Russia added the EU on its ‘unfriendly list’, which the nation described as nations who have done “unfriendly activity towards Russia, Russian companies and citizens.” Not only did Russia add EU on its list, but also moved to ban exports with the 48 countries on its ‘unfriendly list’ till December 2022.
- Russia announced on Thursday that it has banned more than 200 products and equipment until the end of the year, as a response to sanctions imposed over its war against Ukraine. The announcement reads, “The Government has approved a list of imported goods and equipment that are temporarily prohibited from being exported from Russia. The decision will be effective until the end of 2022…The list includes over 200 products, including technological, telecommunication and medical equipment, vehicles, agricultural machinery, electric equipment, as well as railway cars and locomotives, containers, turbines, metal and stone cutting machines, video displays, projectors, consoles and switchboards. This measure is necessary to maintain stability on the Russian market.”
- Since taking off major Russian banks from the SWIFT global system, many are anticipating that the people of Russia and its elites will try to bypass sanctions imposed using cryptocurrencies. This is why there has been many calls to centralized exchanges to restrict the accounts of the Russian people on their platform.
- However, the narrative of Russia using cryptocurrencies to circumvent sanctions has been laid to rest. Jake Chervinsky, head of policy at the Blockchain Association in the U.S., went as far as to call these concerns about crypto “totally unfounded,” as he explains in a Twitter thread that Russia, “can’t and won’t use crypto to evade sanctions.”
- Further echoing this sentiment was Ari Redbord, the head of legal and government affairs at crypto crime investigator TRM Labs, who stated that it’s too late for crypto assets to be able to provide enough liquidity for Russia and that the public nature of blockchains is already a sufficient deterrent for those seeking to circumvent sanctions. He stated, “Russia cannot use crypto to replace the hundreds of billions of dollars that could be potentially blocked or frozen.”
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Although there have been many calls, top exchanges like Coinbase and Binance have refused to do so stating that by doing so, it will also affect millions of innocent Russians in the process.
The European Commission statement concluded stating, “The EU stands firmly with the brave people of Ukraine. This is why, just this morning, we disbursed EUR 300 million in emergency macro-financial assistance to support Ukraine’s finances. This is the first tranche of our EUR 1.2 billion financial aid package. More will follow.”