Ukraine Expands Financial Sanctions Against Russia, Including Cryptocurrency Services
President Volodymyr Zelenskyy has signed a decree implementing the National Security and Defence Council's decision to amend sectoral sanctions against Russian financial institutions. These restrictions were initially introduced in February 2023 through an NSDC decision, subsequently approved by a resolution of the Verkhovna Rada.
At that time, 50-year sanctions were imposed on all banks, non-bank credit organisations, payment system operators, stock market participants, insurance companies, and investment funds registered or located in Russia.
The National Bank of Ukraine prepared new proposals for this decision, aiming to prevent Russia from utilising modern financial instruments, including cryptocurrency, to circumvent sanctions.
Consequently, sanctions now also apply to operators of platforms for the circulation of digital financial assets, cryptocurrency services, financial platforms, and clearing organisations.
Operations involving virtual assets and the use of platforms, services, or products that facilitate transactions with financial and virtual assets will be prohibited.
Certain provisions of this decision align with approaches introduced in the 19th and 20th EU sanctions packages against Russia. However, Ukraine has adopted a broader approach, extending sanctions to all virtual assets backed by the Russian rouble. This measure is intended to complicate the use of cryptocurrencies for sanctions circumvention.
"Sanctions cannot remain static while Russia constantly changes mechanisms to bypass them. Updating sectoral sanctions means that restrictions apply not only to what Russia used yesterday but also to the financial infrastructure it creates to circumvent sanctions tomorrow," emphasised Vladyslav Vlasiuk, the Presidential Adviser on Sanctions Policy.
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