Closing Loopholes, EU Tightens Sanctions Enforcement with Crypto in Mind

Closing Loopholes, EU Tightens Sanctions Enforcement with Crypto in Mind

Mar 12 Tech Standard

The European Union (EU) is taking a firmer stance against sanctions violations. On Tuesday, the European Parliament overwhelmingly approved a new set of rules designed to harmonize enforcement across all 27 member states. This move is particularly significant for cryptocurrency, as the EU now explicitly includes crypto service providers and assets in its sanctions framework.

Previously, discrepancies in national approaches created weaknesses and loopholes in enforcement. Penalties and definitions of violations varied considerably between countries. This new legislation aims to streamline the process by establishing consistent definitions for sanctions breaches. This could include failing to freeze assets, disrespecting travel bans, or conducting business with sanctioned entities.

The inclusion of crypto-assets and wallets is a crucial step in plugging potential gaps. With the rise of digital currencies, it's become increasingly important to ensure they aren't used to circumvent sanctions. The EU's restrictive measures now explicitly cover crypto, allowing authorities to freeze these assets as well.

This legislation requires final approval from the Council of the European Union before becoming law. However, the Parliament's strong vote signifies the EU's commitment to robust sanctions enforcement. This move sends a clear message that attempts to bypass sanctions, including through crypto, will be met with a unified and coordinated response.


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