EU empowers regulators to block foreign crypto platforms

On July 23 the European Union approved its 21st sanctions package, giving regulators the power to block crypto platforms based in third countries that enable Russian nationals to evade EU sanctions and extending limits on Russian and Belarusian participation in EU-based crypto firms governed by the Markets in Crypto Assets (MiCA) rules.

The package adds four designations linked to an A7 Russian ruble network and applies transaction bans to 14 crypto service platforms established in Georgia, Panama, the United Arab Emirates, the Marshall Islands, Kyrgyzstan and Belarus. The measures also cut identified crypto links with institutions the EU says facilitate evasion.

Two new legal provisions change how the bloc can act against crypto channels used to circumvent restrictions. The first, effective August 25, extends a prohibition on Russians and Belarusians owning, controlling or holding positions in EU-based crypto-asset service providers. The ban now covers the full set of services described in the MiCA framework, including advisory services, portfolio management and transfers made on behalf of customers, under Article 5b of Council Regulation (EU) 2026/1848, which amends Regulation No 833/2014.

The second addition creates a blanket prohibition on transactions with crypto firms or platforms established in third countries that have “systematically and persistently failed” to prevent the provision, exchange or transfer of crypto-assets used to evade EU sanctions. Under new Article 5bc of the amended regulation, engaging directly or indirectly in any transaction with such entities is banned. The rule allows the EU to identify and publish a list of third countries that meet the criteria; that list is currently empty.

Legal specialists say the language resembles secondary sanctions and could raise questions in jurisdictions with conflicting local rules. Nick Turner, an economic sanctions expert, warned regulators in third countries could face pressure regardless of their domestic laws, adding: “Under the new Article 5bc, a country’s regulators are on the hook for failing to stop EU-sanctioned activity, regardless of the country’s own laws.”

EU officials said the changes aim to prevent sanctioned individuals and entities from using offshore crypto services to move funds. Enforcement will depend on the council’s identification of third countries and on cooperation from international regulators and crypto firms.