The EU described cryptocurrencies as “transferable securities” and extended the scope of economic punishments against Russia and Belarus.
The European Union explained that the series of restrictions applied on Russia included digital assets in a statement made on Wednesday. The European Commission highlighted that it is extending the scope of financial punishments against Russia and Belarus due to the armed conflict of Ukraine. The order of the primary legislative entity of the European bloc spoke about digital assets, describing them as transferable securities.
The EU also explained that, by acceding the field of transferable securities, the asset class enters within the scope of the financial punishments applied on Russia and Belarus in response to their active role in the armed confrontation.
Sanctions Also Reached Digital Currencies
The European bloc also revealed the extension of the current restrictions in Belarus to mirror those already applied in Russia. These new packages include restrictions on providing SWIFT interbank res services to three Belarusian financial entities and their subsidiaries, a prohibition on dealings and transactions with the Central Bank of Belarus, and a prohibition on listing shares Belarusian state entities on EU markets.
The statement also highlighted the common understanding that loans and credits to Russia could happen regardless of the circumstances, including digital currencies. The European Commission stressed that clarifying the classification to adhere digital assets was a step to save the proper application of the current banning measures.
EU lawmakers and officials explain that cryptocurrencies could serve as an alternative channel to transport funds in and out of Russia, thus circumventing the financial punishments. Facing this possibility, members debated the extension of sanctions to the crypto environment.
The used classification of “transferable securities” does not appear in the draft EU regulation on digital currencies. These regulations, called MiCA, might come up for a critical vote next week after being suspended a few days ago.
Russia Still Not Using Crypto to Avoid Financial Punishments
Many prominent entities in the crypto world pledged to abide by restrictions from Europe and allies of the West. However, they have resisted complying with massive prohibitions on Russian users. Prominent exchange giants such as Binance and Coinbase have sided with financial freedom as an intrinsic value of digital assets.
Meanwhile, other enthusiasts and specialists from the crypto environment highlighted that Russia’s expertise in using digital assets like Bitcoin to avoid financial restrictions might be a subject of discussion.
Salman Banei, leader of public policy at blockchain analytics firm Chainalysis, let CoinDesk TV know that this situation was “unlikely” to occur. Blockchain Association US policy chief Jake Chervinsky shared a similar opinion regarding the possible event.
On Wednesday, the Financial Crimes Enforcement Network, an office of the US Department of the Treasury, released an advisory on Russia’s intentions to avoid the restrictions imposed on the country; it includes several asset-related red flags.
By: Jenson Nuñez
