Key Points:
- The Commission proposes an EU-wide ban on crypto transfers involving Russia-based entities.
- Proposal reacts to the rebranding of sanctioned providers and the growth of A7A5 stablecoin.
- TRM estimates A7A5 handled about $70bn in sanctions-related flows in 2025.
- Experts say the ban raises costs for evasion but will not eliminate circumvention.
The European Commission is preparing a proposal that would prohibit all cryptocurrency transactions between EU-based entities and Russian-linked counterparts, marking one of the bloc’s most expansive efforts yet to close digital channels used to bypass sanctions.
According to internal documents reviewed by the Financial Times, officials are considering a blanket restriction that would bar cryptoasset transfers involving Russian infrastructure, rather than continuing to blacklist specific exchanges or service providers. The proposal still requires unanimous approval from all 27 EU member states before it can take effect.
The shift reflects growing concern among European regulators that sanctioned actors are adapting quickly, reopening under new names or shifting activity to alternative platforms after enforcement actions. The closure of Russian-linked exchange Garantex, followed by the emergence of successor entities, has reinforced fears that targeted bans alone are insufficient to disrupt illicit financial flows.
Stablecoins and Russian-Linked Networks Draw Scrutiny
European authorities are increasingly focused on crypto networks and stablecoins tied to the Russian financial ecosystem. Blockchain analytics firm TRM Labs reported that the ruble-pegged A7A5 stablecoin and its associated network facilitated roughly $70 billion in transactions linked to sanctioned entities in 2025. The broader A7 ecosystem processed more than $100 billion in transfers in January 2026 alone, according to the firm’s analysis.
TRM Labs’ global policy head, Ari Redbord, described the system as a large-scale infrastructure supporting sanctions evasion, ransomware activity, and illicit marketplaces. Regulators view these networks as difficult to disrupt because they operate across jurisdictions and rely on decentralized infrastructure.
The Commission’s proposal would expand enforcement beyond specific platforms to cover any crypto transactions originating from Russian-based service providers or blockchain infrastructure, potentially increasing compliance obligations for exchanges, custodians, and financial intermediaries operating within the EU.
Enforcement Challenges and Market Implications
Analysts caution that even sweeping restrictions may not fully eliminate sanctions evasion. Firms and individuals can route transactions through intermediaries, offshore brokers, or shell companies in third countries, complicating enforcement efforts.
Blockchain intelligence firm Elliptic notes that the EU has tightened crypto-related sanctions since 2022, limiting access for Russian nationals and entities. However, enforcement remains uneven, particularly when transactions pass through foreign platforms.
The proposal could increase compliance costs for European crypto service providers and push some trading activity to jurisdictions outside EU oversight. At the same time, blockchain’s transparent ledger may help investigators identify suspicious flows, offering regulators an additional enforcement tool as geopolitical tensions continue to reshape digital asset markets.
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