EU imposes first sanctions on ruble-pegged stablecoin 'A7A5' and virtual asset platforms

The European Union (EU) has stepped up sanctions on Russia and, for the first time since the outbreak of the war, introduced cryptocurrency-related sanctions. The measure focuses on blocking virtual assets used as means of money laundering and sanctions evasion.

On the 23rd (local time), according to Cointelegraph, the European Commission adopted the 19th package of sanctions against Russia and fully banned the distribution within Europe of Russia-based cryptocurrency payment service providers and related software. The sanctions included not only Russian energy companies and banks but also institutions based in China, Kyrgyzstan, Tajikistan, Hong Kong, and the United Arab Emirates that aided sanctions evasion.

Kaja Kallas, the EU High Representative for Foreign Affairs and Security Policy, said, "These sanctions directly target Russia's energy, financial, and cryptocurrency sectors," and added, "They also include restrictions on the movement of diplomats to prevent Russian attempts at diplomatic disruption."

The EU pointed out that Russia has been rapidly increasing the use of cryptocurrencies to evade financial sanctions. The Council of the EU said, "Recent activity shows that Russia is increasingly using cryptocurrencies to evade sanctions."

The sanctions include a full ban on the ruble-pegged stablecoin 'A7A5' within the EU. The EU described A7A5 as "a key means used to finance the war" and included the Kyrgyzstan-based company that issued it and the unidentified cryptocurrency platform where the token was heavily traded in the sanctions list.

Additionally, eight banks and oil traders in Tajikistan, Kyrgyzstan, Hong Kong, and the United Arab Emirates were barred from transactions for sanctions evasion. The EU first proposed measures to block Russian cryptocurrency platforms on September 19 and has now begun full implementation with this package.