EU Eyes Tougher Measures to Block Crypto Use to Circumvent Sanctions

The EU will be looking at new ways to make sure digital assets aren’t used to dodge sanctions against Russia, a Financial Times report said Wednesday (March 2).

The bloc is trying to enforce the financial penalties on Russia as part of the action taken by Western powers in the wake of the invasion of Ukraine.

Bruno Le Maire, the French finance minister, said after a video conference that there were things being considered to “further increase the effectiveness” of sanctions, to make sure there were no ways to get around them, including with cryptocurrency. And there could be more ways going forward to deal with them.

Meanwhile, European Central Bank President Christine Lagarde said there should be legislation, so firms engaged in issuing crypto assets or providing services shouldn’t deal with Russian clients.

The discussion in Europe comes as lawmakers in the U.S. and U.K. have also been worried about crypto and the way it could become a back door for moving money.

Large crypto exchanges, including those based in offshore jurisdictions, have said they’ll honor existing sanctions, though they resisted calls for a blanket ban on dealing with Russia, and many of them have said they worry that the restrictions could hurt ordinary Russians.

Many crypto exchanges espouse a libertarian ideology, and sanctions would go against that, the report noted.

“If people want to avoid sanctions there’s always multiple methods,” Changpeng Zhao, Binance chief executive, told the BBC on Wednesday. “You can do it using cash, using diamonds, using gold. I don’t think crypto is anything special.”

Read more: Senators Ask Treasury to Probe if Russia Can Use Crypto to Get Around Sanctions

PYMNTS has written that four Democratic U.S. senators have been looking into whether crypto companies can be made to enforce the sanctions.

Sen. Elizabeth Warren, a one-time presidential candidate, was among the four who wrote a letter asking the Treasury whether decentralized financial structures have been undermining the sanctions.