Europe bans crypto payments to Russians as €10K cap scrapped

abdelaziz Fathi

The European Union is taking further steps to sanction Russia after the recent developments surrounding its invasion of Ukraine.

russia

Announced yesterday, the EU has tightened an already prohibition on providing digital-asset services to Russia. It has imposed a sweeping ban on providing crypto services to Russians, meaning they won’t be able to hold any assets in EU crypto wallets unless they live in the bloc.

The prohibition forms part of the eighth package of restrictive measures announced by the EU against Russia as it seeks to respond to “sham” independence votes being held in Russian-occupied regions of Ukraine.

This package’s other financial restrictions include a price cap on Russian oil, a ban on exporting aviation items and electronic components and restrictions on importing Russian goods that would deprive the country of seven billion euros.

Before the recent rules, European crypto providers were allowed to provide Russian residents and entities with limited crypto payments of up to 10,000 euros ($9,900).

“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 [$9,900] was allowed),” reads a press release published on the European Commission’s website.

A prohibition has also been placed on providing financial advice to wealthy Russians to make it more difficult to store their wealth in the EU.

“In the event of a ban, traders from Russia can switch to such crypto exchanges as FTX, Huobi, Bybit. But if the site is interested in the European market, then it will most likely have to choose – either to keep the audience in Russia, or to support sanctions and not have problems in the European Union,” Sergey Mendeleev, CEO of InDeFi Smart Bank says.

Earlier this year, officials representing the United States government called on their allies to order cryptocurrency exchanges and miners to cut their current ties with Russia.

Specifically, the US diplomats said several of Tokyo-based crypto firms are still running operations in Russia and asked regulators to focus attention on ceasing crypto mining operations in the Irkutsk region of Siberia.

Available information shows that many Russian entities and individuals were looking to liquidate their assets to acquire properties in crypto-friendly regions, like the UAE, through crypto.

Faced with stiffening sanctions over its invasion of Ukraine, Russia is reportedly mulling the idea of accepting Bitcoin or other cryptocurrencies as payment for its international trade.

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