The EU is expanding its crypto sanctions regime, with plans to allow banning transactions with third-country crypto platforms that help Russia evade sanctions.

The European Union (EU) has adopted its 21st round of sanctions against Russia, expanding restrictions on the crypto industry. New measures will allow the EU to impose comprehensive transaction bans on third countries that fail to prevent Russia from using crypto assets to evade sanctions. The sanction package was approved on July 23, including restrictions targeting the Russian ruble stablecoin network A7 and related entities, and placing 14 crypto service platforms based in Georgia, Panama, the United Arab Emirates (UAE), the Marshall Islands, Kyrgyzstan, Belarus and other regions under transaction restrictions. Additionally, the new rules will ban Russian and Belarusian citizens from holding ownership, control or management positions at crypto service providers in the EU subject to MiCA (Markets in Crypto-Assets regulation). The restrictions will take effect on August 25, applying to more services including crypto asset advisory, portfolio management and client asset transfer services. The EU has also added a new crypto transaction ban mechanism targeting third countries. Under the revised regulations, if a country is deemed to have "systematically and persistently failed" to prevent its domestic crypto service providers from helping evade EU sanctions, the European Commission can add it to a restricted list and ban transactions with crypto platforms in that country. Economic sanctions expert Nick Turner said this means the EU is moving toward "secondary sanctions," which require third-country regulators to block EU sanctions targets from conducting activities via local crypto platforms. However, he noted that such measures could trigger regulatory conflicts between different jurisdictions in the future. To date, the EU has not announced any countries added to this third-country list.