UK targets Russian crypto networks in latest sanctions

By Sam Tabahriti

LONDON, May 26 (Reuters) – Britain on Tuesday targeted Russia-linked cryptocurrency platforms, banks and financial networks that it said were used to bypass sanctions, freezing their assets and barring UK firms from processing payments and holding correspondent banking ties.

The measures focus on what London described as “shadow financial systems” underpinning Russia’s war economy, including the Kremlin-backed A7 network, which it said had been used to route funds, finance procurement and exploit foreign banking systems to evade restrictions.

The package also targets crypto exchanges and entities operating Russia-focused platforms, including a Kyrgyz bank and multiple firms registered in jurisdictions including Georgia and the United Arab Emirates, alongside individuals tied to the network.

Britain said it was “tracking down and shutting off” payment routes fuelling Moscow’s invasion of Ukraine.

In a statement, the Russian embassy in London said the anti-Russian sanctions were unlawful and futile. “Russia has long since adapted to external pressure and will not alter its course on account of London’s whims,” the Russian embassy added.

“The consequences of these multiplying restrictions will primarily affect the citizens, businesses, and reputation of the United Kingdom itself.”

CRYPTO EXCHANGE AMONG THOSE TARGETED 

“We will continue to act fast and decisively, alongside our allies, to expose, disrupt and dismantle these networks, and ensure those enabling Russia’s aggression face consequences,” foreign minister Yvette Cooper said in a statement.

Among those sanctioned was Huobi Global S.A., one of the world’s largest crypto exchanges, founded in China in 2013 and now known as HTX.

Britain’s sanctions list said Huobi was involved in providing funds, economic resources, goods or technology to individuals and entities in Russia’s financial sector.

A spokesperson for HTX said in an email: “Regulatory compliance remains our absolute top priority at HTX. We proactively monitor and strictly adhere to regulatory frameworks in all jurisdictions where we operate globally, including the UK.”

The Financial Conduct Authority, Britain’s markets regulator, filed a lawsuit against HTX last October, accusing it of unlawfully promoting crypto asset services to British consumers. 

The FCA did not immediately respond to a request for comment.

The move comes nearly a week after Britain said it would defer a ban on imports of diesel and jet fuel derived from Russian crude refined in third countries to ease supply pressures, a decision it said was a phased approach rather than any easing of sanctions.

(Reporting by Sam Tabahriti; Additional reporting by Kirstin Ridley in London, Elizabeth Howcroft in Paris and Fabiola Arámburo in Mexico City; Editing by William James, David Holmes, Rod Nickel)