Putin's cryptocurrency loophole sparks fears global sanctions may not work against Russia

EU ministers are becoming increasingly worried that Vladimir Putin will use cryptocurrency as a loophole from the global sanctions placed on Russia amid its ongoing invasion of Ukraine.

Prime Minister Boris Johnson imposed huge sanctions on the Kremlin last week, aimed at “crippling” the Russian economy, while other Western nations followed suit.

The sanctions included plans to impose an asset freeze on all major Russian banks and a halt on allowing Russian companies raising finances on UK markets.

And while the Kremlin has confirmed such measures will make life tougher, many are still worried that cryptocurrency could offer them a way out.

As the value of the Rouble continues to fall as a result of the sanctions, the value of Bitcoin is going in the opposite direction, having seen a 13 percent rise since the start of Russia’s invasion last week.

During a video call on Wednesday, EU finance ministers agreed to clamp down on crypto.

Speaking to reporters after the meeting, France finance minister Bruno Le Maire said: “We are taking measures, in particular on cryptocurrencies or crypto assets, which should not be used to circumvent the financial sanctions decided upon by the 27 EU countries.”

Calls are growing for Russians to be banned from crypto altogether, but one of the world’s biggest cryptocurrency exchanges, Binance has ruled out restricting Russians from using their services.

The firm’s founder and Chief Executive Changpeng Zhao said: "We're not against any people.

"We differentiate between the Russian politicians who start wars and the normal people.

"Many normal Russians do not agree with war. We don't control the industry.

"I can publish my sanction list, you can publish yours... Guess what? No-one else is going to follow.

"It just moves Russian users to other smaller platforms."