Italy Cracks Down on Crypto Sanctions Evasion with Mandatory Screening
Italy's central bank has implemented mandatory sanctions screening for cryptocurrency transfers to prevent illicit flows across the EU. According to Banca d'Italia, crypto asset service providers (CASPs) must establish policies and internal controls to enforce EU financial sanctions when processing crypto transactions.
CASPs are required to identify customers and transactions linked to sanctioned entities, ensuring adequate controls are in place. This move aims to curb the increasing use of cryptocurrencies by Iranian and Russian entities to evade financial sanctions.
The A7A5 stablecoin, backed by the Russian ruble, processed $110 billion in cumulative transactions between February 2025 and May 2026, despite being targeted by Western sanctions. Iran's central bank has also eased foreign currency controls to encourage businesses to use cryptocurrencies like Tether's USDt (USDT) and Bitcoin (BTC) for cross-border transactions.
US Treasury Secretary Scott Bessent stated that American authorities had directed a freeze of over $130 million in crypto held in wallets linked to Iran's central bank. Additionally, blockchain analytics company TRM Labs reported more than $3.8 billion in flows between crypto exchange CoinEx and sanctioned Iranian entities over seven years.