EU Blocks Crypto and Energy Revenue to Starve Russia's War Machine

The European Union has announced its 19th sanctions package against Russia, marking a significant escalation in its efforts to disrupt Moscow’s access to global financial systems and energy markets. The measures, approved by the European Commission, explicitly target cryptocurrency platforms for the first time, alongside Russian banks, liquefied natural gas (LNG) operators, and the so-called “shadow fleet” of vessels circumventing existing sanctions. The package, presented by President Ursula von der Leyen, aims to sever revenue streams fueling Russia’s war economy, which relies heavily on fossil fuel exports and digital asset transactions EU targets Russian LNG, banks and crypto in new round of sanctions^[1].

The sanctions include a full transaction ban on 118 vessels linked to Russia’s shadow fleet, which transports oil and gas in violation of EU restrictions. Additionally, the EU plans to accelerate the phase-out of Russian LNG imports by one year, aiming for a complete ban by January 1, 2027. This move follows intense pressure from U.S. President Donald Trump, who has publicly urged European allies to cut energy ties with Russia as a precondition for U.S. sanctions. Trump’s statements, including a direct appeal to NATO nations, emphasized that continued Russian oil purchases weaken diplomatic leverage and bargaining power EU targets Russian LNG, banks and crypto in new round of sanctions^[1].

A novel component of the package is the targeting of cryptocurrency platforms. The EU has identified these platforms as critical to Russia’s efforts to launder illicit revenues and evade Western financial restrictions. While specific platforms were not named in the initial announcement, the move aligns with broader global efforts to regulate crypto transactions for compliance with sanctions. The inclusion of digital assets underscores the EU’s recognition of their growing role in circumventing traditional financial systems. This follows earlier measures in the 16th sanctions package, which expanded crypto restrictions to 83 entities and individuals involved in Russian transactions EU Tightens Sanctions on Russia, Expands Crypto Restrictions^[3].

The package also imposes stricter controls on Russian banks, including a full transaction ban on 22 additional financial institutions. These measures aim to isolate Russia from global payment systems and reduce its access to foreign currency. The EU has also extended bans on refined petroleum products derived from Russian crude, with exceptions for a limited number of countries, including the U.S. and U.K. The Nord Stream 1 and 2 pipelines are now subject to a complete transaction ban, effectively halting their operation and maintenance EU approves 19th sanctions package on Russia, targeting banks, energy and cryptocurrency sectors^[2].

Economic analysis cited by von der Leyen indicates that Russia’s war economy is nearing its limits, with sanctions severely impacting its financial stability. The EU estimates that fossil fuels accounted for one-third of Russia’s government revenues in 2024, highlighting the urgency of curtailing these inflows. The 19th package also expands export restrictions on dual-use goods and technologies, targeting entities in third countries that facilitate sanctions evasion. Notably, the EU has not included the 50%–100% tariffs on China requested by Trump, despite identifying China as a key enabler of Russia’s war efforts EU targets Russian LNG, banks and crypto in new round of sanctions^[1].

Hungary and Slovakia, which have historically retained exemptions for oil imports via the Druzhba pipeline, face potential complications as Rosneft and Gazprom Neft are now subject to full transaction bans. The alignment of these countries with U.S. policy under Trump has intensified scrutiny of their energy dependencies. However, both nations are expected to leverage their veto powers to negotiate concessions, as they have done in previous sanctions rounds EU targets Russian LNG, banks and crypto in new round of sanctions^[1].

The EU’s approach reflects a dual strategy of financial isolation and economic pressure. By targeting crypto platforms, the bloc aims to close a critical loophole in its sanctions framework. Meanwhile, accelerated energy phase-outs and banking restrictions seek to limit Russia’s ability to sustain its military operations. The effectiveness of these measures will depend on enforcement mechanisms and global cooperation, particularly in jurisdictions with less stringent regulatory oversight.