The European Union has revealed its decision to prohibit cryptocurrency services from being provided to Russia. This is part of a plan to crack down on Russia and impose economic sanctions. It is in reaction to what they called a sham referendum in Ukraine.

Due to a shady referendum, the EU is cracking down

The referendum in Ukraine asked citizens in the eastern Ukrainian region of Donetsk if they desired to break away from Ukraine. The results were released three hours after the voting ended, casting doubt on the process's legitimacy. No other entity independently confirmed the findings. The referendum was widely regarded as a "shambles."

The European Union's ban on digital offerings to Russia is part of a broader set of economic and political sanctions. Initially, the ban restricted Russian payments to €10,000 ($9,700). The ban now applies to all cryptocurrency payments.

This follows reports that there has been an increase in Russian businesses using cryptocurrency to circumvent existing sanctions.

The tightening of the restrictions

The European Union stated in a statement, "The existing restrictions on crypto assets have been toughened by prohibiting all crypto-asset wallets, accounts, or custody services, regardless of the amount of the wallet.”

"The package broadens the scope of offerings that can no longer be supplied to the Russian government or legal entities established in Russia, including IT consultancy, legal advice, architecture, and engineering services. These are significant because they may weaken Russia's industrial capacity since it relies heavily on importing these services."

The EU claims that sanctions against Russia are effective. "They jeopardize Russia's capability to produce new weapons and fix existing ones, as well as impede material transport."

What else do you think is the motivation behind the EU’s decision to ban Russian cryptos? Let us know your thoughts by sharing this article on social media.

Oct 11, 2022
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