UK Russia Crypto Sanctions

The UK's 26th May 2026 sanctions package applies regulation 17A of the Russia (Sanctions) (EU Exit) Regulations 2019 to a crypto-asset exchange for the first time, placing designated platforms in the same position as sanctioned Russian banks. The most prominent target, HTX, is alleged to have channelled more than $1.5 billion into Russia's war economy through the A7 network, so UK VASPs and financial institutions in England and Wales now need asset-freeze controls, on-chain tracing and reporting systems that can identify exposure anywhere in the payment chain.

Summary

• On 26th May 2026, the FCDO designated 18 entities and individuals under the Russia (Sanctions) (EU Exit) Regulations 2019 targeting the A7 network, which the UK government said had moved more than $90 billion into Russia’s economy in the preceding year.
• Regulation 17A now applies to a crypto-asset exchange for the first time, so UK financial institutions must not process transfers involving a designated exchange at any point in the payment chain.
• HTX is alleged to have facilitated more than $1.5 billion of Russia-linked flows through previously sanctioned exchanges, including Garantex and Grinex.
• UK VASPs need wallet attribution and on-chain tracing because direct name screening alone is no longer sufficient.
• Firms that identify frozen funds or blocked transfers should notify OFSI and submit a SAR to the National Crime Agency where suspicion arises.

On 26th May 2026, the FCDO announced 18 new designations with immediate effect, targeting A7, a Kremlin-backed payment infrastructure described by the UK government as a conduit for military procurement, oil-sale proceeds, and sanctions evasion. The same package follows a broader UK enforcement trend that includes the extension of correspondent banking restrictions and growing scrutiny of sanctions compliance by regulated firms. For wider background on the UK-Russia sanctions framework, see Eldwick Law’s UK’s Sanctions on Russian Financial Institutions.

The FCA, PRA and OFSI stated on 10th March 2022 that financial sanctions rules do not distinguish between cryptoassets and other forms of assets, and that using cryptoassets to circumvent sanctions is a criminal offence under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and regulations made under the Sanctions and Anti-Money Laundering Act 2018. The 26th May 2026 package carries those principles into direct crypto-exchange designations and increases the compliance burden on firms operating in England and Wales.

What did the UK’s 26th May 2026 package designate?

The 26th May 2026 package designated 18 entities and individuals alleged to have enabled Russia’s war economy to continue operating despite existing UK restrictions. HTX, registered as Huobi Global S.A., is the most prominent designation and is alleged to have channelled more than $1.5 billion into Kremlin-linked channels through flows involving previously sanctioned exchanges and A7’s ruble-backed stablecoin, A7A5. TRM Labs separately reported that the A7 network had recorded more than $56 billion in volume in its analysis of Russia-linked sanctions evasion activity.

Other designated entities include EXMO Exchange Limited, Rapira Group LLC, Aifory LLC, Bitpapa IC FZC LLC, Arvix LLC, Nueva Cryptologia, and Open Joint Stock Company Eurasian Savings Bank, alongside named individuals including Igor Gorin, Irina Akopyan, Sergey Mendeleev and Liran Cohen. The package also reaches Georgian exchange operators and a Kyrgyz bank, showing the UK’s concern with third-country structures used to obscure a Russian nexus.

How does Regulation 17A apply to crypto exchanges?

Regulation 17A of the Russia (Sanctions) (EU Exit) Regulations 2019 prohibits UK credit and financial institutions from maintaining correspondent banking relationships with designated persons and from processing transfers involving a designated entity at any point in the payment chain. The 26th May 2026 designations apply that restriction to crypto exchanges for the first time, so UK VASPs must assess not only direct counterparties but also prior and intended transaction routes.

As OFSI explained in its December 2023 guidance: “the banks must act this way both 1) in a situation where the remitting bank is designated and 2) in a situation where a non-designated bank has initiated the payment but it has been processed via a designated bank before reaching the UK bank”. The same logic now applies to designated crypto exchanges, because a UK firm may breach Regulation 17A even where the customer itself is not designated.

Under regulation 12 of the Russia (Sanctions) (EU Exit) Regulations 2019, a person must not make funds available directly or indirectly to a designated person where the person knows, or has reasonable cause to suspect, that the funds are being made available to that designated person. Under regulation 7 of the Russia (Sanctions) (EU Exit) Regulations 2019, UK persons may be exposed even when they operate outside the UK if their conduct falls within the Regulations’ scope.

What do UK firms need to do now?

UK VASPs and financial institutions in England and Wales should re-screen customers and counterparties, deploy wallet attribution and on-chain tracing, and refresh SAR and OFSI notification procedures to reflect the May 2026 designations. UK firms should also review service agreements and escalation processes to identify and prevent designated-exchange exposure before a transfer is processed.

The FCA, PRA and OFSI listed red flags including customers transacting from sanctioned jurisdictions, wallet addresses linked to sanctioned entities, and the use of obfuscation tools such as mixers or tumblers. The SRA’s June 2025 guidance on complying with the UK sanctions regime also confirms that firms need effective systems and controls to avoid breaches.

Frequently asked questions

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Eldwick Law advises UK and international businesses on Russia sanctions compliance, OFSI licensing, and disputes involving financial and trade restrictions. For sanctions advice, contact Eldwick Law via the contact page, call +44 (0) 203 972 8469, or email mail@eldwicklaw.com.