The eighth package of sanctions against Russia was approved by the European Union Commission on October 6. Russians were banned from conducting any transactions and storing cryptocurrencies in the wallets of cryptocurrency operators registered in the EU countries. In April, similar restrictions were already introduced for Russian users' accounts, where the amount of assets exceeded 10 thousand euros, but there was no question of a complete ban on the provision of services.

According to the published documents, the sanctions apply to all citizens of the Russian Federation, regardless of whether they live in Russia or not. However, with a temporary or permanent residence permit in any of the EU countries, it is possible to continue to use the services of crypto services that impose restrictions.

The bans from crypto businesses are already taking effect. LocalBitcoins, a P2P service registered in Finland, began sending out notices to Russian users about the termination of work with them, and NFT-platform Dapper, which has no office in Europe, announced the freezing of Russian accounts. A community manager at Dapper clarified on Twitter that the company's payment processing partner falls under EU regulation.

Restrictions should probably be expected from those crypto services for which the European market is important. Large crypto exchanges have local offices or partners in the EU, as well as licenses to operate in EU states. Experts already recommend Russian citizens to withdraw funds from centralized trading platforms.

How exchanges react

Binance, the largest exchange by trading volume, has licenses to operate in Lithuania, Italy, Spain and France. The exchange representatives say that they have not yet received official confirmation of the tightening of EU sanctions against crypto assets of Russian citizens. In February, the exchange said it would not block the accounts of Russians, but after the fifth package of EU sanctions came into force, it introduced a limit of 10 thousand euros on the amount of assets on the accounts of Russian citizens.

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Exchanges Coinbase, FTX, Crypto.com, Huobi, Kraken, Gemini, Cex, bitFlyer also received licenses to operate in EU states or the UK. FTX has 15 subsidiaries, some of which are licensed in the EU, and its website states that it will comply with any international sanctions. At the same time, the exchange did not previously impose a limit of 10 thousand euros for accounts of Russians.

Huobi Global also did not restrict Russian accounts under the April sanctions requirements. On October 4, the exchange published a statement that it would continue to serve users from Russia and Belarus, but later the page with the message was removed from the site.

OKX, ByBit, Gate.io, KuCoin, and Bitfinex exchanges did not impose sanctions against Russians earlier and did not make a statement after October 6. OKX platform is one of the largest in terms of trading volume, but its site was included in the register of banned sites of Roskomnadzor (the Federal Service for Supervision of Communications, Information Technology and Mass Media), and the access to the exchange from Russian IP-addresses is restricted.

Where to store cryptocurrency

If it is a matter of principle to use centralized exchanges (CEX), it is better to split the deposit and store assets on several exchanges, advises Vladislav Utushkin, founder of TOTHEMOON Group. In his opinion, it is possible to use the wallets of exchanges ByBit, OKX, KuCoun or Huobi.

At the same time, according to Utushkin, it is better to use decentralized exchanges (DEX) to exchange cryptocurrencies and stablecoins. "It's not even about sanctions. By storing cryptocurrency on centralized exchanges, you run the risk of being left empty-handed, because it does not belong to you within the full meaning of the word. It is stored on the wallets of the exchange, and you see only numbers on your account," the expert recommends.

Among the most popular decentralized exchanges are Uniswap, Curve, Pancakeswap, Sushiswap or liquidity aggregator 1inch. The services work using the logic of smart contracts without centralized control. Even if regulators somehow restrict access to their interface on official resources, the ability to use DEX will remain.

The same applies to decentralized (or non-custodial) wallets. Even if the developer companies' operators are affected by EU sanctions, having a seed phrase from a wallet, you can export it to any other, and continue to use the crypto assets. Utushkin mentions TrustWallet, MetaMask and SafePal as the most popular wallets, and also advises against transferring funds to both wallets and exchanges with no reputation and reviews, citing the fact that scammers can take advantage of the information about the introduction of sanctions.

If you need to withdraw funds in fiat currencies, almost any exchange with a P2P-exchange service, such as ByBit or OKX, is suitable, says Utushkin. You can use online exchangers, but you should also be careful about the reputation of the services. When choosing a site for the exchange, you should read the reviews about it on aggregators.