The European Union is preparing a sweeping ban on all crypto transactions involving Russian entities as part of a new sanctions package aimed at tightening economic pressure on Moscow.
The proposed measures are designed to prevent Russia from using digital assets to bypass sanctions, with Brussels targeting crypto platforms seen as successors to the sanctioned Russian exchange Garantex.
According to TRM Labs, Garantex and Iran’s Nobitex accounted for more than 85% of financial flows to sanctioned entities and jurisdictions in 2024.
The plans, first reported by the Financial Times, also place Kyrgyzstan under scrutiny amid concerns it has acted as a commercial relay for Russia since the invasion of Ukraine.
EU data cited in the report shows imports from the bloc to Kyrgyzstan have surged 800% since the war began, while Kyrgyz exports to Russia have risen 1,200%.
The proposal faces political hurdles because sanctions require unanimous approval from all 27 EU member states, with three countries already resisting the measures.
The push underscores growing concern in Brussels that reactive regulation has failed to curb crypto-based sanctions evasion, as new platforms and tokens continue to replace those that are shut down.