Consolidated FAQs on the implementation of Council Regulation No 833/2014 and Council Regulation No 269/2014 [Version of 21 March 2023]

The European Commission (EC) has published an updated consolidated version of its „FAQs on the implementation of Council Regulation No 833/2014 and Council Regulation No 269/2014“ in the light of the on going conflict in Ukraine. The consolidated version includes FAQs concerning EU sanctions „adopted following Russia’s military aggression against Ukraine“.
The update includes the following new question in section C „FINANCE AND BANKING“, topic 6 „CRYPTO ASSETS“ on page 66, which we would like to present in full, quote:
Question 2: Article 5b(2) of Council Regulation (EU) No 833/2014 states that “It shall be prohibited to provide crypto-asset wallet, account or custody services to Russian nationals or natural persons residing in Russia, or legal persons, entities or bodies established in Russia”.” Does this mean that European operators are expected to close the crypto accounts of their Russian customers and return their digital assets, or the freezing of these assets?
Answer: The prohibition means that no new services and/or accounts are allowed and existing services and/or accounts must be closed. In the latter case assets on the accounts and/or in the services should be returned to the Russian customer, or be converted into fiat currency or another asset category that is not subject to sanctions. The provisions should be read in conjunction with the limit on deposits laid on in Article 5b of Council Regulation (EU) No 833/2014. To this extent, the converting of crypto-assets in fiat deposits would permissible up to the amount allowed for deposits. No freezing of assets is foreseen under this article.
Furthermore, Question 1 „Are crypto-assets and in particular cryptocurrencies covered by these sanctions?“ was updated. However, the update includes only form-related adjustments**.