The European Union is finalizing a new package of sanctions aimed at closing loopholes that officials say have allowed Russia to use cryptocurrency to circumvent existing restrictions.
The EU is seeking to “ban all cryptocurrency transactions with Russia” as part of the upcoming 20th sanctions package, the Financial Times reported on Tuesday.
Unlike previous efforts targeting Russia-linked entities spun out of already sanctioned platforms, the newly proposed measures are broader and are designed to close Russia’s crypto loophole entirely.
“Any further listing of individual crypto asset service providers […] is therefore likely to result in the set-up of new ones to circumvent those listings,” according to an internal European Commission document on the proposed sanctions, cited by the FT.
Brussels seeks total shutdown of Russia-linked crypto channels
While the new sanctions package is still being finalized and is expected to be adopted on Feb. 24, European Commission President Ursula von der Leyen said last week that the measures would target 20 additional Russian regional banks, as well as several banks in third countries.
Among the foreign lenders, the EU has proposed sanctioning two Kyrgyz banks, Keremet and OJSC Capital Bank of Central Asia, along with banks in Laos and Tajikistan, Reuters reported on Monday. If approved, the listed institutions would be barred from transactions with EU individuals and companies.
“In order to ensure that sanctions achieve their intended effect [the EU] prohibits to engage with any crypto asset service provider, or to make use of any platform allowing the transfer and exchange of crypto assets that is established in Russia,” the Commission’s document reportedly states.
Sanctioned A7A5 emerged as one of the largest non-dollar stablecoins in 2025
The report suggests that the measures may target Russia-linked payments platform A7 and its ruble-pegged stablecoin, A7A5. The operator has denied facilitating sanctions evasion, calling such claims politicized and unsupported by evidence.
Despite facing multiple rounds of sanctions, A7A5 emerged as one of the fastest-growing non-dollar stablecoins by market value in 2025, according to data from CoinMarketCap and DefiLlama.
Top five largest non-USD stablecoins by market capitalization. Source: DefiLlama
Some analysts, however, questioned the reliability of the token’s reported activity.
Blockchain analytics company Global Ledger said it identified patterns consistent with wash trading that may have inflated A7A5’s volumes and simulated demand. Global Ledger also expressed doubts about the EU’s ability to fully restrict crypto transactions involving Russia.
Analysts question whether EU can fully enforce crypto sanctions
“The EU’s recent move to impose a blanket ban on Russian crypto activity — specifically targeting the A7A5 stablecoin — highlights a fundamental misunderstanding of decentralized liquidity,” Global Ledger co-founder and CEO Lex Fisun told Cointelegraph.
Fisun said the holders of tokens such as A7A5 can swap them into globally traded stablecoins through autonomous onchain liquidity pools, without relying on centralized intermediaries that conduct compliance checks.
Once assets move through large global exchanges and liquidity hubs, transaction histories can become increasingly difficult to trace, he said, adding:
“At this stage, distinguishing these funds from legitimate market activity becomes a technical impossibility […]. For European exchanges to enforce such a ban, they would essentially have to block all flows from major global trading hubs, a move that would paralyze the legitimate crypto market.”
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While sanctions may succeed in cutting Russian entities off from regulated European platforms, Fisun said decentralized infrastructure remains resistant to direct censorship, making a complete technical blockade unlikely.
The developments come as Russia advances domestic legislation on digital assets. On Tuesday, Russian lawmakers passed a law on its third reading establishing the procedure for freezing and confiscating digital currency.
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