EU hits Russia crypto wallets in another round of sanctions

LAGOS (CoinChapter.com) — The European Union in an attempt to ensure Russian oligarchs and citizens don’t use cryptocurrencies to evade sanctions has implemented new restrictions on crypto wallets in the country.

The new sanctions come after European Central Bank President, Christine Lagarde, warned that crypto was being used to evade sanctions. The sanction will target crypto wallets, banks, monetary standards, and trusts, ensuring that potential loopholes from existing sanctions are secured.

As a result of the sanction, Russian payments to EU crypto wallets will now be capped at around $10,000. This will invariably make it more difficult for Russians to evade sanctions measures enacted to deter the ongoing conflict.

Notably, since February 24, after Russia invaded Ukraine, global condemnation has followed, resulting in the rollout of sanctions against the country. 

Josep Borrell, High Representative for Foreign Affairs and Security Policy, explained that the new sanction was due to Russia’s recent activities in Ukraine. He said:

“The aim of our sanctions is to stop the reckless, inhuman, and aggressive behavior of the Russian troops. And make clear to the decision-makers in the Kremlin that their illegal aggression comes at a heavy cost.”

Russians Collectively Hold Over $130bn In Bitcoin, Other Crypto

In a similar development, Russian Prime Minister Mikhail Mishustin has indicated that the crypto holdings of Russians are worth billions of dollars.

Mishustin, at the annual report presentation of the government, claimed that Russians collectively hold more than $130 billion in cryptocurrencies. He explained that the large number was a result of more than 10 million young people having opened crypto accounts.

The Russian Prime Minister’s claim confirms previous reports that Russia’s total crypto holdings are about $214 billion. It further confirms reports that 12% of the total global crypto holdings are owned by Russians.

This is very impressive because it means Russia’s crypto holding is as strong as its gold strength. According to White House estimations, Russia’s gold holdings make up about 20% of the country’s central bank’s overall reserves.

Russians Cannot Use Crypto To Evade Sanctions —Binance CEO

Meanwhile, Changpeng Zhao, founder, and CEO of Binance has disproved the statement that Russia could use crypto to evade sanctions.

The CEO of the world’s largest crypto exchange noted that Russians cannot use crypto to evade sanctions because crypto transactions are not anonymous. He said:

“Most transactions do need to go through a centralized exchange, any large transactions of value, because the decentralized exchanges don’t have enough liquidity yet. […] So that’s a misconception that Bitcoin is anonymous. Bitcoin’s anonymous feature is very, very weak.”

Similarly, the Bank of Russia’s First Deputy Governor, Ksenia Yudaeva also noted that sanction evasion with crypto in Russia is practically impossible. He explained that cryptocurrencies like Bitcoin are actually a financial pyramid scheme.

FTX CEO Sam Bankman-Fried has also expressed his frustration about the ongoing argument. He noted that nobody smart would use crypto to evade sanctions due to the transparency of blockchain tech.