China Fires Back: Crypto Sanctions Escalate as Beijing Counters EU’s Digital Asset Crackdown

The crypto cold war heats up as China retaliates against EU sanctions with targeted digital countermeasures. Geopolitical tensions spill into blockchain corridors—proving decentralized tech can't escape centralized power plays.

Digital Iron Curtain Descends

Beijing's response weaponizes crypto infrastructure, freezing EU-linked wallets and blacklisting compliance nodes. The move exposes blockchain's paradoxical vulnerability: immutable ledgers still bend to political will.

Traders Caught in Crossfire

Exchange flows between Eurozone and Chinese platforms plummet 73% overnight. Market makers scramble to reroute liquidity through offshore hubs—because nothing says 'decentralization' like emergency OTC desks in the Caymans.

The Compliance Arms Race

Watch for chain analytics firms to become the new military contractors. Every KYC algorithm now doubles as a sanctions-enforcement tool. Privacy coins? Suddenly looking less like criminal tools and more like diplomatic passports.

As regulators treat crypto rails like SWIFT 2.0, one truth emerges: the 'apolitical network' fantasy just got arbitraged out of existence—along with your favorite EU-China trading pairs.

New Front Has Opened In Already Tense Relationship Between China And EU

In early August, the EU unveiled a package of expanded sanctions aimed at tightening pressure on Russia’s war effort in Ukraine. It included blacklisting of several Chinese companies and individuals accused of helping Moscow circumvent restrictions by enabling crypto transfers pegged to sanctioned entities.

The EU regulators alleged that these firms provided wallets, OTC services, or mixing tools to process digital assets linked to Russian interests. 

Previously, the sanctions targeted Russian exchanges and crypto facilitators directly. However, this is the first time China-based institutions have been included in the list.

Chinese officials have warned of “necessary countermeasures” to protect the “legitimate rights and interests” Chinese enterprises.

Apparently, China is said to be reviewing technology export licenses and imposing tighter scrutiny on EU-based blockchain and fintech companies operating in the Chinese market. Chinese regulators are allegedly auditing EU-linked banking partners that have exposure to Chinese crypto-adjacent companies.

Will China Accelerate Promotion Of Cross-Border Settlements In e-CNY?

Countries like China, Russia, and Iran are creating their own global currency called BRICS. BRICS stands for Brazil, Russia, India, China, and South Africa. And more than a dozen other countries have already signed on.

Independently, these countries are dwarfs to the US. But together, they represent 40% of the world’s population. According to the IMF, BRICS will represent 50% of the world’s GDP by 2030.

The US is no longer holding all the cards at the global table.

In 2025, the world is G7 countries like Canada, France, Germany, Italy, Japan, the UK, US and the European Union, vs. BRICS.

Like BRICS, the G7 countries control 40% of the world’s GDP. This is also why, only two years ago, China was taking an active role in the negotiations between Saudi Arabia, the second largest oil hegemon, and Iran, the 14th largest economy in the world.

If this were a kickball game, we’re seeing China recruit the teams and set up the field while America still picks dandelions.

Key Takeaways

• China is said to be reviewing technology export licenses. The country is imposing tighter scrutiny on EU-based blockchain and fintech companies operating in the Chinese market.

• State regulators are allegedly auditing EU-linked banking partners that have exposure to Chinese crypto-adjacent companies.