Ukraine cracks down on Russia’s crypto flows in step with new EU sanctions

Ukraine is now targeting Russia’s ability to evade financial restrictions using modern technology, including cryptocurrencies and stablecoins.

The move brings Kyiv’s sanctions regime in line with the EU’s most recent packages of measures against Moscow and goes beyond them in certain areas.

Zelenskyy slaps Russia with new crypto sanctions

Ukrainian authorities are expanding restrictions for the Russian financial sector in an effort to make it harder for Moscow to fund its war on their country.

The decision to update the sanctions, adopted by the National Security and Defense Council, will be enforced with a decree signed by President Volodymyr Zelenskyy.

The measures were first introduced by the NSDC in February 2023 and approved by Ukraine’s legislature, the Verkhovna Rada, his office noted in a press release on Wednesday.

The original ones targeted all Russia-based banks, non-bank credits institutions, payment system operators, securities market participants, insurance companies, and investment funds.

The current amendments, proposed by the National Bank of Ukraine (NBU), should prevent Russia from utilizing modern financial tools like cryptocurrency to circumvent the earlier sanctions, which must remain in place for a period of 50 years.

They now apply to the operators of various Russian firms working with digital financial assets, crypto service providers and clearing organizations.

Russia-linked transactions involving virtual assets as well as the use of platforms, services or products facilitating such financial flows will be prohibited, too.

Moscow employs these systems to make cross-border payments in violation of international sanctions, pointed out Vladyslav Vlasiuk, Ukraine’s chief sanctions officer.

Quoted by the English-language publication Kyiv Independent on Thursday, he elaborated:

“Russia is increasingly using cryptocurrency infrastructure, ruble-pegged stablecoins, and specialized payment platforms for international settlements.”

Ukraine targets Russian stablecoins

Speaking to reporters, Vlasiuk highlighted in particular the growing transactions with the Russian fiat-tied digital currency A7A5, which has been already sanctioned by the EU and other Western powers.

The Ukrainian official emphasized the crypto is being used to pay for shipments, including of electronic components and other dual-use goods.

Vladyslav Vlasiuk cited recent estimates, according to which the monthly volume of this kind of transactions exceeds $5 billion. He also stressed that the stablecoin is just one of the elements of the new financial infrastructure which Russia is building to bypass fiat restrictions.

A7A5 was created by the Russian payments network A7, and backed by ruble deposits at the PSB Bank, both subject to Western sanctions.

A7 is majority-owned by Ilan Shor, a fugitive Moldovan oligarch with Russian passport, and co-owned by the state-controlled PSB, formerly Promsvyazbank. In February of this year, Kyiv alleged that the A7 platform was enabling payments related to “the supply of components used in the production of Russian missiles.”

Its cryptocurrency is currently issued by the Kyrgyzstan-registered entity Old Vector. According to one of its executives, the coin processed over $100 billion within a year of its launch in early 2025.

The new amendments align Ukraine’s sanctions framework with that of the EU, more specifically the Union’s 19th and 20th sanctions packages against the Russian Federation.

Vlasiuk insisted they make it possible to block new financial schemes developed by Russia, whose full-scale invasion of his nation continues into its fifth year. The presidential Commissioner for Sanctions Policy stated:

“Sanctions cannot remain static while Russia constantly adapts its methods of evasion. Updating the sectoral sanctions means that the restrictions now target not only what Russia used yesterday, but also the financial infrastructure it is building to evade sanctions tomorrow.”

Brussels’ latest round of measures includes a full ban on Russia-based crypto platforms, hits a Kyrgyz-based entity trading A7A5 and prohibits transactions with another ruble-pegged stablecoin, the RUBx token.

The Ukrainian sanctions are broader than the European, Zelenskyy’s office remarked, and cover all virtual assets backed by the Russian ruble to make evasion even more difficult.

“Ukraine’s measures also take the EU’s restrictions a step farther, extending sanctions to Russia’s entire financial sector rather than targeting specific platforms or crypto assets,” its statement added.

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