Expanded Prohibitions and New Obligations for Crypto-Asset Service Providers

2025. On October 23, the European Union adopted the 19th sanctions package, which significantly expands restrictions on crypto-asset transactions and payment services. The changes affect both the financial sector and the digital asset market, making circumvention of sanctions using crypto-assets almost impossible.

Below, we will examine the main aspects of the new sanctions package, its impact on crypto-asset service providers and market participants, as well as the increased liability risks.

Expanded List of Prohibited Crypto-Asset and Payment Service Providers

As of August 9, 2025, it is prohibited to directly or indirectly engage in any transactions with the following financial institutions:

1. Heihe Rural Commercial Bank Co. Ltd.;
2. Heilongjiang Suifenhe Rural Commercial Bank Co. Ltd.;

Furthermore, as of November 25, 2025, several more service providers will be added to this list, including crypto-asset platforms and payment companies:

1. Payeer;
2. CJSB JSCB Tolubay;
3. OJSC Eurasian Savings Bank;
4. CJSC Dushanbe City Bank;
5. CJSC Spitamen Bank (Tajikistan);
6. OJSC Commerce Bank of Tajikistan.

To combat the proliferation of new entities replacing those listed, the transaction prohibition will also apply to equivalent entities if specific criteria are met. Specifically, it is prohibited to directly or indirectly engage in any transactions not only with the aforementioned companies, but also with:

1. any legal person, entity, or body acting on behalf of or at the direction of the said companies;
2. companies that provide crypto-asset or payment services and are considered mirror entities or successors.

It is important to note that any crypto-asset or payment service provider will be considered a mirror entity or successor of the aforementioned companies if at least two of the following criteria are met:

1. maintenance of identical content or transaction flows;
2. similarity in brand, design, or user interface;
3. overlap in ownership or management;
4. redirection of users from the sanctioned entity;
5. use of shared technical infrastructure (e.g., codebase, domains, applications).

Given the above, anyone who has ever collaborated with the aforementioned companies or plans to conduct crypto-asset transactions must be particularly careful. This means not only ensuring that the transaction is not conducted with sanctioned companies, but also with any other entity that could act on behalf of these companies, operate at their direction, or be their mirror entity or successor.

It will be very difficult to avoid liability for violating the sanctions regime if, for example, a company’s website, design, brand, or domain name visually resembles the website design, seal, domain, or similar of a sanctioned company, and from the perspective of a consumer or supervisory authority, there is an obvious connection to the respective company, even if its legal name has been changed.

The prohibition described above will not apply to:

1. contracts concluded with the previously listed legal persons, entities, or bodies by October 24, 2025, and whose performance is scheduled until April 25, 2026;
2. receipt of payments for contracts concluded before the date of adoption of the sanctions.

This allows companies to complete existing transactions, but entering into new commitments with sanctioned persons is strictly prohibited.

Prohibition on Providing Any Crypto-Asset Services to Russia-Related Persons

In addition to specific crypto-asset prohibitions, the 19th sanctions package also establishes a broader range of restrictions on the provision of crypto-asset services to persons and companies associated with Russia.

Until now, it was prohibited to provide only digital wallet, account, or custody services to Russian nationals, natural persons residing in Russia, or any legal person, entity, or body established in Russia.

However, as of October 24, 2025, it is prohibited to directly or indirectly provide any crypto-asset services, as defined in Regulation (EU) 2023/1114 (MiCA Regulation), to the aforementioned natural and legal persons.

The prohibition includes the following services:

1. custody and administration of crypto-assets on behalf of clients;
2. operation of a trading platform for crypto-assets;
3. exchange of crypto-assets for funds;
4. exchange of crypto-assets for other crypto-assets;
5. execution of orders for crypto-assets on behalf of clients;
6. placing of crypto-assets;
7. reception and transmission of orders for crypto-assets on behalf of clients;
8. provision of advice on crypto-assets;
9. provision of crypto-asset portfolio management;
10. provision of crypto-asset transfer services on behalf of clients.

In addition to crypto-asset services, Russia-related persons are also prohibited from receiving the following services:

1. issuance or acceptance of payment instruments, as defined in Directive (EU) 2015/2366 (PSD2);
2. issuance of electronic money, as defined in Directive 2009/110/EC.

This ensures that the sanctions regime covers the entire spectrum of financial technology, preventing the use of alternative payment or digital asset schemes to circumvent sanctions.

Despite the extensive prohibitions, competent authorities (in Latvia, this is the Financial Intelligence Unit) may grant permits to provide certain services if they are:

1. necessary to cover basic needs (food, housing, medicines, taxes);
2. intended for payment for work or legal services;
3. intended solely for commission fees or management of frozen funds;
4. necessary to cover extraordinary expenses;
5. necessary for diplomatic missions or consular functions;
6. related to the trade of non-prohibited goods and services between the EU and Russia.

Prohibition on Transactions with A7A5 Crypto-Asset

As of November 25, 2025, it is prohibited to engage in any transactions related to the A7A5 crypto-asset.

Publicly available information indicates:

1. A7A5 is a stablecoin pegged to the Russian ruble, introduced in early 2025, possibly in Kyrgyzstan;
2. the value of the crypto-asset is pegged to the Russian ruble (1 A7A5 = 1 Russian ruble);
3. by mid-2025, the circulation of the A7A5 crypto-asset reached several billion dollars, thus becoming one of the largest stablecoins outside the US dollar zone;
4. it is assumed that the payment company A7, Moldovan businessman Ilan Shor, and Promsvyazbank (PSB) are associated with it.

A7A5 has become a significant instrument for converting rubles and for international payments outside the traditional banking system, therefore this prohibition is a direct response to attempts to circumvent sanctions.