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Lawyers assessed the likelihood of introducing strict restrictions on Russian users of crypto-exchanges and told which services may be at risk
New EU sanctions will ban European companies from providing crypto wallets, accounts, or crypto storage services to Russian citizens or organizations registered in the country, Bloomberg claims, citing a source.
The Binance crypto exchange, which complies with EU sanctions, told RBC-Crypto that they did not introduce any additional restrictions for Russians. The company continues to operate as usual and recommended that users follow only official announcements.
In April, the site restricted access for users who live in Russia and have assets worth more than €10,000. Such site clients can only use the withdrawal function. The measures were taken in accordance with the fifth package of EU anti-Russian sanctions.
Experts assessed the likelihood of introducing new restrictions on users from Russia and told which services could be at risk.
“It is worth starting to withdraw cryptocurrency from foreign services”
The scenario of imposing strict restrictions on users from Russia is quite realistic, says Andrey Tugarin, Managing Partner at GMT Legal. According to him, this is confirmed by the fact that Russian users have already come under restrictions from a number of crypto platforms in connection with the sanctions of this year. Many cryptocurrency exchanges have completely refused to serve Russian users by blocking their accounts.
In the spring, various restrictions were imposed on Russian, Ukrainian and Belarusian users by the cryptocurrency exchanges Gopax, CEX IO, KUNA, Qmall and BTC-Alpha.
In the event of the introduction of new restrictions, an essential point will be the jurisdiction in which the crypto service is registered (cryptocurrency exchange, wallet, exchanger – VASP (virtual asset service provider), the lawyer added. It depends on the location whether the company is obliged to comply with any restrictions , “dictated” by the sanctions.
“However, we should not forget about the spread of secondary sanctions. Even if sanctions apply to a particular country and they come, for example, from the American government, and nearby countries do not accept / ignore them, then these sanctions can also apply to these countries, ”the specialist warned.
According to Tugarin, it is worth starting to withdraw cryptocurrency from foreign services, and you can store it using non-custodial wallets. Such applications cannot freeze or manage user funds, but they are not responsible for their safety.
“It is impossible to exclude situations when the owners of cryptocurrencies will face problems”
A complete ban on the provision of services to Russians is logical and makes the sanction really effective, such a measure may be a reaction to the recently announced plans of the Russian government to allow the use of cryptocurrencies in international settlements, Mikhail Zhuzhzhalov, senior lawyer at Tomashevskaya & Partners law firm, suggested.
Since the current ban applies to all Russians, it is likely that the upcoming ban will have a similar scope, the expert added. The consequence of the ban will not be the freezing of crypto assets, but the refusal to provide services.
“As a rule, the terms of use of the services in this case stipulate that the crypto assets will be transferred to their owner, however, situations cannot be ruled out when the owners will encounter problems, for example, if the provider does not have enough cryptocurrency if he stored it on a common account along with the cryptocurrency of other users, as well as with their own funds, ”Zhuzhzhalov warned.
Ekaterina Popova, Operations Director of the ITS WM multi-family office, called possible new sanctions against Russian cryptocurrency holders “very expected.” Popova believes that new restrictions are “begging”, based on the rhetoric of European financial regulators.
The news about possible sanctions against Russians is a signal for those who still hold funds on European licensed crypto exchanges, Dmitry Machikhin, CEO of the BitOK service, added.
“This is a signal that it is time to withdraw assets. There’s nothing you can do about it,” he concluded.
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