New START expires: Russia says no arms limits; UK adds crypto sanctions
The New START nuclear arms treaty expired on Feb. 4, 2026, leaving the US and Russia without legally binding limits for the first time in over 50 years. Russia’s Foreign Ministry said both countries are “no longer bound by any obligations” under New START, effectively ending decades of strategic arms control.
New START previously capped each side at 1,550 deployed strategic warheads, 700 deployed delivery systems, and 800 launchers. Verification measures were already suspended after tensions escalated post-2022, and a later Russian proposal to extend New START for one year received no formal US response. With no successor deal, the framework lapsed.
Separately, on May 26, 2026, the UK announced new sanctions targeting crypto-asset exchanges and networks tied to evading Russian sanctions. For the first time, the UK used correspondent banking restrictions directly against crypto entities—potentially cutting off banking relationships that underpin fiat on-ramps and off-ramps. Reduced banking access can translate into lower liquidity, wider spreads, and higher trading costs on affected platforms.
For traders, the key linkage is that New START’s collapse increases geopolitical and risk-premium uncertainty, while UK enforcement adds a compliance-and-liquidity shock to parts of the crypto market.
Bearish
Geopolitics can quickly reprice risk. The expiration of New START removes a major constraint on US–Russia strategic forces, which historically tends to lift hedging demand and increase macro volatility. That background can pressure crypto risk appetite in the short term, especially during periods when liquidity is already sensitive to external shocks.
At the same time, the UK’s action is directly market-structure relevant: correspondent banking restrictions on crypto entities can disrupt fiat on-ramps/off-ramps and reduce exchange liquidity, widening spreads and raising effective trading friction. Similar sanction-driven compliance moves in the past have often led to (1) short-term volume drops on affected venues, (2) higher volatility around headline enforcement dates, and (3) longer-lived “flight to quality” toward larger, more compliant platforms.
Long term, if the market can reroute banking access or exchanges adapt compliance tooling, the liquidity impact may fade. But with New START gone and no successor verification framework, the risk backdrop is likely to remain elevated, keeping downside bias more plausible than upside momentum.