The European Commission is seeking to impose an EU-wide ban on all crypto transactions with Russia, as part of ongoing efforts to ensure the effectiveness of sanctions.
According to official documents seen by the Financial Times, the ban would prohibit any EU-based individual or entity from transferring cryptocurrencies to and from a Russia-based counterparty.
The proposed ban is a response to instances where sanctioned Russian crypto service providers have simply relaunched under different names, as has been witnessed in the case of shuttered exchange Garantex, which reemerged last year as Grinex.
The European Commission is aware of this problem, with the internal document noting that any “further listing of individual cryptoasset service providers [is] likely to result in the set-up of new ones to circumvent those listings.”
Given this probability, the Commission is seeking to prohibit transactions “with any crypto asset service provider, or to make use of any platform allowing the transfer and exchange of crypto assets that is established in Russia.”
This new proposal has been put forward with an additional measure that would ban the export of some dual-use goods to Kyrgyzstan, with both policies requiring support from all 27 EU member states before becoming enforceable.
Three member states have voiced concerns over the potential new measures, according to unnamed diplomatic sources, something which may undermine plans to implement the bans in time for the fourth anniversary of Russia’s incursion into Ukraine on February 24.
“Purpose-built” sanctions evasion infrastructure
The EU’s sanctions envoy David O’ Sullivan will also be travelling to Kyrgyzstan later in February, in order to communicate the bloc’s concerns over the Kyrgyz Republic’s lax stance towards sanctioned Russian entities.
This relates not only to the ability of sanctioned exchanges to rebrand, but also to the growth of the A7 network and its ruble-pegged stablecoin A7A5, which passed $100 billion in transaction volume in January.
Much of this volume was processed in 2025, with the 2026 TRM Crypto Crime Report indicating that A7A5 and its associated wallet network handled approximately $70 billion in sanctions-related flows last year.
According to TRM Labs’ Global Head of Policy Ari Redbord, this ecosystem didn’t emerge by accident, having evolved into a “mature, industrialized system” built to support ransomware gangs, darknet markets and “large-scale” sanctions evasion.
“It was purpose-built for sanctions evasion, operating as bespoke financial plumbing for Russia-aligned actors when access to dollar and euro rails was constrained,” he told Decrypt.
Redbord adds that the A7A5 network and its associated networks have been refined over years, with infrastructure, brokers, payment rails and service providers being established in order to keep funds moving even as traditional financial channels were shuttered as a result of enforcement actions.
Will a blanket ban work?
Given the scale of illicit Russian crypto networks, Redbord agrees that a blanket ban on transactions with Russian entities could be an improvement on the current approach, which is undermined by the constant rebranding and regeneration of ecosystems.
“A broader prohibition shifts the focus from who is on a list today to whether a transaction is tied to a high-risk, sanctions-evasion network at all,” he said. “It creates clearer rules, stronger supervisory leverage, and more friction at key access points.”
While other commentators agree that a comprehensive ban could provide greater efficacy, they also point out that the EU already has quite extensive restrictions when it comes to Russia and crypto.
Speaking to Decrypt, a spokesperson for Elliptic pointed out that the EU had introduced a ban on providing ‘crypto-asset services’ to Russian nationals and residents as part of expanded sanctions introduced in October of last year.
“The restrictions are already there and are broad,” they said. “Greater clarity and profiling is always a good thing when tightening sanctions, but equally it needs regulators to supervise and enforce against the existing standards.”
And even with the widening of restrictions, there could still be the issue of circumvention, something which Elliptic notes is neither new nor limited to digital assets.
“That is why the AML regime requires a number of assessments, including initial and ongoing due diligence and monitoring of all customers to which a crypto firm has a ‘business’ relationship with,” said Elliptic’s spokesperson. “The benefit of crypto is that the transactions, unlike fiat, are on a public ledger and so in some/many cases, this obfuscation technique can be identified.”
Ari Redbord also acknowledges that circumvention “will still happen” with a blanket ban, given that Russian actors will continue to disguise their activities via the use of intermediaries, third-country brokers and shell entities.
He added, “But tightening the EU perimeter raises the cost of doing so and increases the likelihood that these flows surface at regulated choke points.”
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