EU Sanctions Hit Crypto Platforms in Georgia, UAE, Panama

The EU adopted its 21st sanctions package against Russia on July 23. It adds transaction bans on 14 crypto service platforms in Georgia, Panama, the UAE and several other countries, and it cuts Russian and Belarusian nationals from owning or controlling EU-based crypto service providers starting Aug. 25. Four entities tied to the A7 Russian ruble network were also designated.

The legal core is Article 5bc of amended Regulation 833/2014. It bars transactions with any entity providing crypto-asset services in a country the EU deems non-compliant with its sanctions regime. The rule turns on where the service provider sits, not where the counterparty sits, so lawyers read it as extraterritorial.

Nick Turner, an economic sanctions expert, said the provision marks a shift for Brussels. The EU has long resisted the secondary sanctions the U.S. uses to pressure third countries. Now it is borrowing that tool. National regulators in member states carry the duty to block sanctioned activity even when local law in the crypto firm's home country says otherwise, he said. The arrangement will create friction.

The Aug. 25 ownership restriction builds on a rule that took effect Jan. 18, 2024. It now covers every service category listed under the Markets in Crypto Assets regulation (MiCA), including advisory work and portfolio management.

Turner sees the immediate function as diplomatic leverage. The list of non-compliant countries is empty, and the EU Council has not named anyone. The threat of designation could push some jurisdictions toward cooperation before the EU formally acts, he said.