Regulatory bodies from around the globe are slowly and steadily seen getting their hands on cryptocurrency related activities. In the latest document issued on March 19, the U.S Department of Treasury said that it will start adding all crypto wallet address to its sanctions list if it finds them to be linked to the sanctioned individuals.
In an update to the FAQ section of the sanctions compliance, the department clearly stated that the Office of Foreign Assets Control (OFAC) might add digital currency addresses to its own sanctions list, like the Specially Designated Nationals And Blocked Persons List (SDN). This measure will be “to alert the public” about that specific property being associated with the sanctioned individual.
In the guidance notice, the government agency said: “OFAC may add digital currency addresses to the SDN [specially designated nationals] list to alert the public of specific digital currency identifiers associated with a blocked person.”
It further added that “OFAC’s digital currency address listings are not likely to be exhaustive. Parties who identify digital currency identifiers or wallets that they believe are owned by, or otherwise associated with, an SDN 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’ ownership and any other relevant details.”
Although the OFAC doesn’t provide any compliance solution, it does go on to make suggestions that a tailor-made risk-based program of compliance should be linked to individual corporations, exchanges, and even cryptocurrency users. This project will ensure the screening of sanctions along with other relevant measures in this context. Hence the program looks quite similar to a KYC procedure.
The OFAC says that U.S citizens and firms need to make sure at their end that they are not involved in any sort of transactions prohibited and blacklisted by sanctions. The Treasury Department also made it clear that it will use the sanctions as a measure to fight malicious crypto actors, who take the advantage of digital currency “as a complement to existing tools”.
The Treasury claims: “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.”
Dave Murray, a former senior adviser to the undersecretary of Treasury for terrorism and financial intelligence, said: “Even though people will probably stop using an address once it has been listed, the addresses will be extremely valuable to financial institutions. They can use the addresses to build out the sanctioned person’s network and potentially identify the new address that a sanctioned person is using.”
The Treasury’s announcement came the same day U.S President Donald Trump order a ban on trading of Venezuelan cryptocurrency ‘Petro’ that was designed by Venezuela to bypass U.S sanctions.
