On 26 May 2026, the UK government published its 26th Russia sanctions package, designating 18 entities under the Russia (Sanctions) (EU Exit) Regulations 2019 and applying Regulation 17A(2) to designated crypto-asset exchanges for the first time. Regulation 17A had previously been applied only to correspondent banking relationships with sanctioned Russian banks; this package extends the instrument to virtual asset service providers, marking a shift in UK sanctions enforcement toward the crypto sector.
Regulation 17A(2) of the Russia (Sanctions) (EU Exit) Regulations 2019 prohibits UK credit institutions, financial institutions, and virtual asset service providers from processing inbound or outbound transfers with any entity designated under that provision. The exchange HTX (formerly Huobi) was designated on grounds that it allegedly channeled over USD 1.5 billion to Russian counterparties. A ruble stablecoin issuer and other entities linked to the Kremlin-backed A7 payments network were also designated in the same package.
UK-authorised banks, payment service providers, and registered crypto-asset firms must screen all incoming deposits against the designation list and trace prior transfer hops to identify exposure to a designated exchange. Outbound transfers require assessment of the intended transfer path before processing. Firms that conduct correspondent relationships with or route payments through designated entities face criminal penalties under the Sanctions and Anti-Money Laundering Act 2018.
The A7 payments network, which British officials allege processed proceeds from Russian oil sales and supported military procurement, is the primary targeting rationale for this package. The Office of Financial Sanctions Implementation has not yet published specific technical guidance on the tracing standard for crypto-asset transfers under Regulation 17A, requiring virtual asset service providers to apply existing blockchain analytics and AML risk frameworks pending further guidance.
Licentium advises crypto-asset businesses and financial institutions on UK and EU sanctions compliance obligations. Firms with exposure to sanctioned jurisdictions or counterparties are invited to contact us. Work we undertake includes VASP sanctions screening programme design, OFSI designation analysis, transaction monitoring calibration for crypto assets, and multi-jurisdictional sanctions risk assessment.