Crypto Use Preventive Measures To Be Taken By G7 And EU Countries To Avoid Sanctions Evasion

G7 countries and European countries exploring ways of empowering their imposed sanctions on Russia, as they see crypto use as the potential medium the sanctions can be evaded.

G7 And EU Move To Prevent Crypto Use To Evade Sanction

Crypto use prevention to be acted upon by the Group of Seven (G7) countries after accessing how cryptocurrencies can be used to avoid Western sanctions meted out to Russia’s invasion of Ukraine. Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States make up the G7 countries.

Finance ministers and central bank governors from the G7 countries met virtually with Ukraine’s Finance Minister Serhiy Marchenko this week. AFP quoted Germany’s finance minister, Christian Lindner, as saying on Wednesday:

We should take measures to prevent listed persons and institutions from switching to unregulated crypto assets. We are working towards this in the context of the German presidency of the G7.

“The problem is known and we are working on it,” Lindner said in an interview with Welt TV on Wednesday. He explained that “It’s about maximally isolating Russia at all levels” and having a “maximum ability to sanction,” which he said includes crypto.

This week, the U.S. Treasury Department also said that it is observing Russian efforts to use crypto to evade sanctions. “We will continue to look at how the sanctions work and evaluate whether or not there are leakages, and we can address them,” said Treasury Secretary Jenet Yellen.

Since Russia’s invasion of Ukraine, an increasing number of countries and organizations have imposed sanctions on it. Some Russian banks have been cut off from the SWIFT messaging system, thus isolating them from the rest of the world.

Four sanctions packages have been imposed on Moscow by the EU’s 27 member states, including the freezing of Bank of Russia assets and the disconnecting of seven Russian banks from the SWIFT financial-messaging system.

Following a meeting of EU finance ministers this week, French Finance Minister Bruno le Maire stated that cryptocurrencies will be included in the EU’s sanctions on Russia. At a press conference, he stated:

We are taking measures, in particular on cryptocurrencies or crypto assets which should not be used to circumvent the financial sanctions decided upon by the 27 EU countries.

The French finance minister went on to say that the sanctions on Russia had been quite effective, claiming that they had disordered the Russian financial system and rendered the Bank of Russia incapable of protecting the currency. This week, the Russian currency has lost more than 30% of its value.