A Cryptocurrency Trap: How New Russian Laws Will Support EU Sanctions

The 20th EU sanctions package imposed a sectoral ban on all Russian crypto services. From May 24, 2026, any transactions with Russian-registered crypto providers and exchange platforms will become illegal for market participants under EU jurisdiction.

The new sanctions coincide with Russian authorities’ plans to centralize the domestic crypto market: the bill ” On Digital Currency and Digital Rights ” proposes mandatory storage of cryptocurrencies in depositories and a ban on personal wallets. The combination of these two developments creates serious risks for Russian crypto investors.

BeInCrypto’s editorial team discussed the implications of the new restrictions with experts. Here’s how our interviewees believe the 20th sanctions package will impact Russia’s crypto industry.

Will all crypto that touches the Russian circuit now become “dirty”?

Mikhail Uspensky, a member of the State Duma’s expert council on legislative regulation of cryptocurrencies , believes that it is already considered de facto as such: large platforms, primarily European ones, refuse to accept cryptocurrency with a Russian connection.

However, not all experts share such a categorical assessment. Daria Mitrokhina, a leading lawyer for international projects at Right Side , clarifies that cryptocurrency used solely by Russian citizens or unsanctioned platforms will not carry the same risk of blocking as assets used through sanctioned platforms. According to her, such cryptocurrency is not considered “dirty,” as it is defined as assets linked to criminal activity. However, it carries increased risk and is subject to sanctions, which, in her opinion, will make foreign platforms and countries even more cautious when dealing with Russians.

As a reminder, the 20th package also imposes sanctions on those who support and facilitate the circulation of Russian cryptocurrency on the international stage.

Olga Ocheretyanaya, a senior associate in the cryptocurrency regulation and mining practice at Right Side , takes a similar position . She believes that the EU sanctions’ focus on Russian platforms and exchanges, specific tokens linked to the Russian financial system, and sanctions-evasion infrastructure does not automatically render any asset that was once held by a Russian resident or passed through a Russian wallet “dirty.” However, she warns that if the new regulations in Russia are implemented as currently formulated, it will inevitably result in all officially registered crypto platforms in Russia being sanctioned, and the wallets and cryptocurrency passing through them will be labeled .

Is it possible to comply with Russian laws and still avoid labeling?

Working with Russian sanctioned platforms with the subsequent goal of bringing cryptocurrencies to international markets is futile—it will likely result in blocking , warns Daria Mitrokhina. However, individuals still have the option to choose other platforms within the framework of legal compliance, excluding sanctioned services.

Will the authorities abandon plans to centralize the crypto market?

The idea of ​​introducing digital depositories is causing confusion and bewilderment among a large number of market participants , notes Mikhail Uspensky. According to him, closing the internal loop with mandatory licensed custodians is a Russian innovation, born out of the habit of imposing securities regulations on the distributed ledger. The EU’s position should further alarm the bill’s authors:

“Transactions by centralized custodians will inevitably sooner or later create clusters/hubs in the blockchain that are easily tracked and marked with a ‘red Russian trace.’ A hack, leak, simple oversight, or other leak of data linking address identifiers to a Russian digital depository will cause problems for dozens, if not hundreds, of legitimate Russian residents seeking to buy crypto from a legitimate exchange,” warns Mikhail Uspensky.

However, lawyers believe the sanctions will have the opposite effect. The Russian Federation’s primary goals are to restrict the market from external influence, strengthen the ruble, develop its own payment systems, and increase independence from the international market, notes Daria Mitrokhina:

“Strengthening sanctions is more likely to accelerate than slow them down, based on the ‘they tighten them, we leave’ approach. We should now expect a focus on settlements with friendly countries and increased domestic oversight.”

Olga Ocheretyanaya agrees with this assessment: sanctions, on the contrary, are pushing Russian authorities to build their own closed circuit, leaving open the possibility of completely isolating external services. Meanwhile, the question of how cryptocurrency within this circuit will be “cleaned” and how liquidity will be replenished remains open.

She also emphasizes that EU sanctions only affect those within their perimeter: European providers and users. In fact, Russia has long since established channels through Asia, the Middle East, and other friendly jurisdictions, and key flows will simply extend further into areas where EU regulations don’t apply.

Plans for cross-border settlements using the digital ruble

The creation of the digital ruble was initially not intended to circumvent sanctions, but rather to create its own payment system, recalls Daria Mitrokhina. The initiative was aimed at working with neutral and friendly countries, as EU sanctions have long exposed Russia as an undesirable participant in their market. The new sanctions package will likely not affect the plans for the digital ruble’s rollout, but will impact its geography and operational procedures. Plans will have to be adjusted rather than scrapped.

According to Olga Ocheretyanaya, the issue is not so much about EU sanctions prohibiting participation in the development of the necessary infrastructure for the digital ruble, but rather about reaching a fundamental agreement among BRICS members to use this instrument in settlements among themselves.

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The post A Cryptocurrency Trap: How New Russian Laws Will Support EU Sanctions appeared first on BeInCrypto.