Following the conflict in Ukraine, Russia has officially annexed four different parts of the European country. After legally finalizing these territories, Vladimir Putin held a massive rally where he announced that these were now a part of Russia.
After Russia annexed various territories in Ukraine, the EU was quick in putting up sanctions. The new sanctions are in place to stop the continuous effort that the Russian President is making in the country.
More importantly, one of the major things that the sanctions package targets are cryptocurrencies. More specifically, it is targeting people who often trade cryptocurrencies with Russian companies or other individuals. It was a bold move to say the least, as regulating and ensuring that none of the transactions will be going to Russia will be much harder than most people expect.
8th Round of Sanctions
Following Russia’s invasion of Ukraine on the 24th of February, the EU has issued eight rounds of sanctions, including the most recent one. Since this specific sanction was a direct result of Russia annexing four different territories, it also came with many serious implications, namely that cryptocurrencies could not be traded with it.
The sanctions also prohibit EU nationals to take up high posts, throughout different Russian companies that are owned by the state. All of these rules and regulations will also apply to all of the newly annexed regions of Ukraine.
The logistics of Tracking Cryptocurrencies
Even at its lowest point, millions of transactions are happening every few minutes. Tracking where that money is coming from is often close to impossible, and finding out where it is going will be even less likely to decipher.
Furthermore, with thousands of transactions happening every second, the EU will have to set up a massive infrastructure to track these transactions.
But despite all of their effort, it is also very unlikely that the EU will have a very difficult time stopping transactions from and to Russia. As a further step, the EU might ban the use of crypto altogether, which is very unlikely given its popularity and might ban specific cryptocurrencies that are commonly used to transfer funds to Russia.
Asking Crypto Firms Not to Work with Russia
The more likely turn this could take is that the EU could put in a formal request for various companies to stop offering their services to Russia. Some of the crypto exchanges and DeFi exchanges will be more than willing to follow through on the EU’s request to pause all business with Russia.
It is also likely that some of the crypto exchanges refuse to make this change, as they wish to take advantage of one of the most lucrative crypto markets in the country.