United States Could Add Crypto Wallets To OFAC Sanctions List

us crypto sanctions

Following Venezuela’s launch of its new national, oil-backed Petro cryptocurrency, United States President Donald Trump signed an order imposing new sanctions against the economically crippled South American country. The order blocks any US citizens from transacting using the Venezuelan crypto. Now, a new report following the aftermath of Trump’s order, shows that the US Department of Treasury is considering adding crypto wallets to their growing list of sanctions.

The US Department of Treasury updated its FAQ on sanctions compliance as of March 19th. The update includes notes from the Office of Foreign Assets Control (OFAC) that discuss how cryptocurrencies are treated the same as fiat, when pertaining to Specially Designated Nationals (SDN). Those on the SDN list are people or organizations that are tied to terrorism, money laundering, drug trafficking, or those that have ties to foreign governments that are sanctioned by the United States - North Korea, for example.

The agency said in the update, "To strengthen our efforts to combat the illicit use of digital currency transactions under our existing authorities, OFAC may include as identifiers on the SDN List specific digital currency addresses associated with blocked persons,” though they continued that the address listings won’t likely be “exhaustive.”

The move will see additional cryptocurrency exchanges enforcing know-your-customer (KYC) standards, to ensure they are not harboring these sanctioned wallets, as noted by the Department of Treasury’s update:

“Parties who identify digital currency identifiers or wallets that they believe are owned by, or otherwise associated with, a [specially designated nationals] and hold such property should take the necessary steps to block the relevant digital currency and file a report with OFAC that includes information about the wallet’s or address’s ownership, and any other relevant details.”

Cryptocurrencies are often used by criminals due to its pseudo-anonymous nature. However, recent reports emerging from whistleblower Edward Snowden claim the NSA has been working on identifying and monitoring bitcoin and other cryptocurrency users since as early as 2013, with advancements very likely to have been made in the years since. If the reports are true, the two branches of the United States government are likely to collaborate closely and together enforce sanctions and combat criminal activities.