EU Proposes Blanket Ban on Crypto Deals with Russia as Moscow Formalizes Mining

EU moves to block Russian crypto ties as Russia scales up domestic mining

The European Commission is preparing a wide-ranging ban on cryptocurrency transactions with Russian entities as part of the EU’s 20th sanctions package against Moscow, according to the Financial Times. Unlike earlier measures that targeted individual exchanges or wallet addresses, the draft proposal would prohibit EU individuals and companies from dealing with any crypto-asset service provider established in Russia — a blanket approach designed to close loopholes that have allowed sanctioned actors to rebrand or shift operations.

What’s in the draft
– A prohibition on crypto dealings between EU residents or firms and crypto-asset service providers based in Russia.
– Proposed restrictions aimed at Russian digital finance infrastructure, including ruble-linked stablecoins and any future Russian central bank digital currency (CBDC).
– The measure would require unanimous approval from all 27 EU member states, creating a political and practical hurdle for adoption and enforcement.

Why Brussels is pushing this
EU officials argue that cryptocurrencies, stablecoins and digital payment rails have become alternative channels for cross-border value transfers that can bypass traditional banking oversight and sanctions enforcement. The bloc’s wider aim is to tighten controls on potential sanctions-evasion vectors in the crypto space.

Russia’s crypto response: formalizing mining and investment products
At the same time, Russia is formalizing and expanding its domestic crypto sector. Broker Finam has started trading units in a newly registered investment fund that backs industrial-scale cryptocurrency mining operations. The fund — registered with the Bank of Russia — pools capital to finance mining infrastructure, including facilities that use natural gas in regions such as Mordovia. These structured vehicles offer domestic investors exposure to crypto production without direct ownership of tokens.

Why it matters
– For the EU: the draft ban signals a tougher stance on digital-assets as potential sanctions-evading tools, and aims to close a patchwork of gaps that targeted sanctions have left open.
– For Russia: regulated mining funds and institutionalized products help legitimize crypto activity domestically and can be framed as instruments of economic resilience amid Western pressure.
– For the market: if approved, the ban would raise compliance costs for EU market participants, complicate cross-border services, and potentially push Russian crypto activity further into privacy-preserving or offshore channels — heightening enforcement challenges.

The next steps
The proposal still needs unanimous backing from all EU member states, a requirement that could slow or alter the measure. Meanwhile, Russia’s continued push to institutionalize mining and financial products reflects a broader strategy to leverage abundant energy resources and cold climates to maintain a significant role in global mining even as geopolitical tensions increase.

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