The European Union is weighing a sweeping ban on cryptocurrency transactions involving Russia as part of a broader effort to close loopholes in its sanctions regime, according to a document seen by the Financial Times.
The proposal reflects growing concern in Brussels that Moscow is using digital assets and related platforms to bypass existing restrictions imposed after Russia’s invasion of Ukraine. EU officials say some crypto services linked to Russia have re-emerged under new names after earlier sanctions, allowing trade flows that may support the country’s military efforts.
According to the document, the EU is particularly focused on shutting down what it describes as “copycat Russian crypto entities spun out of already sanctioned platforms.” These successor firms are believed to be enabling financial activity that undermines sanctions and facilitates trade connected to the war.
One of the measures under discussion aims to prevent the rise of replacements for Garantex, a Russian cryptocurrency exchange sanctioned by the EU last year. Garantex has also been targeted by the United States, with the Treasury Department’s Office of Foreign Assets Control redesignating the platform and linking it to funds originating from other exchanges associated with criminal activity.
Data from blockchain intelligence firm TRM Labs underscores why regulators are paying close attention. The firm has reported that Garantex, alongside Iran-based exchange Nobitex, accounted for more than 85 percent of crypto inflows to sanctioned entities and jurisdictions in 2024.
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The proposed package could have implications beyond Russia. Kyrgyzstan is mentioned in the document as a country of concern, with the EU alleging that companies there have exported dual-use goods to Russia, including electronics used in drones and weapons systems. The figures cited suggest a sharp rise in trade flows since the war began: imports of high-priority items from the EU to Kyrgyzstan have reportedly increased nearly eightfold, while exports from Kyrgyzstan to Russia are said to be up 1,200 percent.
EU officials argue that these trends point to a “particularly high risk of circumvention” and justify tighter controls on both financial transactions and the export of sensitive goods.
Before any measures can take effect, the proposals must receive unanimous backing from all 27 EU member states. According to the Financial Times, three countries have expressed reservations about a blanket ban on crypto transactions with Russia, highlighting the political and economic balancing act facing policymakers.
