EU Considers Ban on All Crypto Transactions With Russia

Why Is the EU Tightening the Net on Russian Crypto Activity?

The European Union is weighing a sweeping ban on cryptocurrency transactions involving Russia as part of a broader effort to curb the use of digital assets to bypass sanctions linked to the war in Ukraine. According to a document obtained by the Financial Times, the proposals focus on blocking “copycat Russian crypto entities spun out of already sanctioned platforms,” which EU officials believe are being used to support Russia’s war effort.

The measures are meant to stop the emergence of so-called “heirs” to Garantex, a Russian crypto platform sanctioned by the EU last year and later redesignated by the United States. European officials argue that shutting down one platform has not been sufficient, as new entities can rapidly appear with similar ownership, infrastructure, or client flows.

If adopted, the proposals would mark one of the most aggressive attempts yet by the EU to close off crypto-based routes for sanctions evasion, extending scrutiny beyond individual platforms to networks and successors that mirror already blacklisted platforms.

Investor Takeaway

How Do ‘Copycat’ platforms Fit Into the Sanctions Picture?

According to the Financial Times, EU officials are concerned that sanctioned platforms are being replaced by structurally similar platforms designed to keep transaction flows alive. These copycat entities may reuse operational setups, client networks, or technical infrastructure, allowing activity to continue under a diverse name.

The case of Garantex sits at the center of this concern. TRM Labs has said that Garantex, alongside Iran-based platform Nobitex, accounted for more than 85% of inflows to sanctioned entities and jurisdictions in 2024. US authorities have also alleged that most funds sent to linked to criminal activity.

For EU policymakers, that data strengthens the case that targeting individual platforms is insufficient. Instead, they are looking at patterns of behavior and continuity, treating successor entities as extensions of already sanctioned infrastructure rather than as independent businesses.

Why Is Kyrgyzstan Part of the Proposal?

The document obtained by the Financial Times also points to Kyrgyzstan as a country of concern, linking it to wider efforts to restrict trade flows that could support Russia indirectly. Alongside crypto measures, the EU is proposing a ban on the export of certain dual-use excellents, alleging that companies in Kyrgyzstan have sold items such as electronics used in drones and weapons to Russia.

Trade data cited in the document highlights the scale of the concern. “Imports of common high-priority items from the EU to Kyrgyzstan have grown almost 800 percent since the war began, while exports from the country to Russia are 1,200 percent higher,” the document says, adding that continued trade “demonstrates a continuing and particularly high risk of circumvention.”

While the crypto measures and excellents export controls are distinct, they share a common theme: blocking indirect routes that allow sanctioned activity to continue through third countries or alternative financial channels.

Investor Takeaway

What Would a Full Crypto Transaction Ban Involve?

The proposals under discussion would go further than previous EU actions by potentially banning all cryptocurrency transactions with Russia, rather than targeting specific platforms or wallets. Such a move would place compliance obligations not only on platforms, but also on service providers, custodians, and potentially decentralized infrastructure with identifiable EU touchpoints.

In practice, enforcement would hinge on know-your-customer controls, transaction monitoring, and screening of counterparties. The challenge for regulators lies in balancing the broad scope of the ban with the technical limits of tracing activity across .

For market participants, the direction of travel is clear even if the final form is not. Exposure to Russian-linked flows, whether direct or indirect, is becoming a high-risk category that firms will need to address explicitly in compliance frameworks.

What Happens Next Inside the EU?

Before any measures take effect, the proposals would need unanimous approval from all 27 EU member states. According to the Financial Times, three countries have expressed reservations about a full ban, highlighting the political hurdles that remain.

Those reservations could lead to narrower wording, phased implementation, or additional carve-outs. Even so, the push to address successor crypto entities suggests that future sanctions packages will be written with less tolerance for technical workarounds.