As far back as the early 1800s, the U.S. Department of the Treasury has issued economic sanctions to achieve foreign policy and national security objectives. Today, the Treasury’s Office of Foreign Assets Control (OFAC) sanctions countries, individuals, companies, and groups — like international drug traffickers or terrorists — that pose specific threats to U.S. interests.Over the years, bad actors have tried a variety of tactics to evade OFAC’s sanctions. More recently, some have pivoted towards crypto, presuming that crypto transactions are anonymous or untraceable. Adapting to this tactic, OFAC began including cryptocurrency addresses as identifiers in sanctions designations. The first such instance occurred on November 28, 2018 when OFAC designated two Iran-based individuals tied to the SamSam ransomware scheme, which demanded ransom payments in Bitcoin. Since that first designation, OFAC has included many wallet addresses and even entire crypto services in its designations. In this article, we’ll discuss:
OFAC’s guidance on crypto-related sanctions compliance
OFAC’s crypto-related sanctions to date
Sanctions screening challenges for crypto businesses
In March of 2018, OFAC began answering questions about virtual currency on its website. The OFAC Frequently Asked Questions (FAQs) also define what the terms “digital currency,” “digital currency wallet,” “digital currency address,” and “virtual currency” mean as they apply to OFAC’s sanctions programs. In October of 2021, OFAC went a step further, publishing Sanctions Compliance Guidance for the Virtual Currency Industry, a guide outlining how both companies and crypto users can mitigate the risk of facilitating crypto crime.2026
