Blanket crypto ban targets Russia rails but one chokepoint decides whether flows die or just relocate offshore

Key Highlights

• Related ReadingRussia to allow crypto derivatives but not custody as local trading volume hits $93BUS president Donald Trump administration's crypto initiatives have been linked to the rise in Russian digital asset market activity.
• May 29, 2025 · Oluwapelumi Adejumo The Commission has also sanctioned specific infrastructure associated with Russia's crypto ecosystem, including platforms such as Garantex and the broader A7 network. So what does a “blanket ban on all crypto transactions involving Russia” add?The most plausible reading is that it broadens the perimeter beyond custody services to include any EU person or business that deals with Russia-linked crypto service providers or facilitates Russia-related transactions. The draft language explicitly flags third-country facilitators, signaling that the EU intends to pursue intermediaries outside its direct jurisdiction.
• This is the shift from “sanction the actor” to “sanitize the rail,” an attempt to make the infrastructure itself unusable, rather than just blocking individual entities. How evasion works and matters more than actorsSanctions evasion in crypto operates across three layers: identity, jurisdiction, and instrument.
• Identity evasion is the easiest and least interesting, such as fake KYC, shell entities, and nominee accounts. Jurisdiction evasion is where the real action is: routing through non-EU virtual asset service providers, over-the-counter desks, Telegram-based brokers, and third-country banks that don't enforce EU sanctions. Instrument evasion means shifting to stablecoins and bespoke payment rails that bypass traditional banking chokepoints. Stablecoins dominate this landscape.
• Chainalysis reports that stablecoins account for 84% of illicit transaction volume, and that share is growing as enforcement pressure on regulated exchanges rises. A7A5, the Russia-linked stablecoin already sanctioned by the EU, exemplifies the strategy: a tokenized payment system designed to replicate correspondent banking functions without relying on Western financial infrastructure. The Garantex case study illustrates how enforcement can disrupt these rails, but also how quickly activity reconstitutes. Garantex, a Moscow-based exchange sanctioned by the US in 2022, continued operating until Reuters reported that Tether blocked wallets associated with the platform. The service suspended operations almost immediately, demonstrating that stablecoin issuers can act as a decisive chokepoint.