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U.S. Office of Foreign Assets Control Releases Guidance for Crypto Space

The U.S. Treasury Department is releasing new sanction guidelines for the cryptocurrency industry.

The Department’s Office of Foreign Assets Control (OFAC) recently published new instructions for crypto businesses and investors, saying that individual investors should expect to be scrutinized in terms of who they can and can’t deal with, just like traditional financial institutions.

 

“The growing prevalence of virtual currency as a payment method… brings greater exposure to sanctions risks. Accordingly, the virtual currency industry, including technology companies, exchangers, administrators, miners, wallet providers, and users, plays an increasingly critical role in preventing sanctioned persons from exploiting virtual currencies to evade sanctions and undermine US foreign policy and national security interests.

The brochure states that everyone engaged in crypto-related activities must be vigilant regarding who they transact with in order to avoid violating sanctions rules.

“OFAC is issuing this guidance to assist the virtual currency industry in mitigating these risks. OFAC sanctions compliance obligations apply equally to transactions involving virtual currencies and those involving traditional fiat currencies.

Members of the virtual currency industry are responsible for ensuring that they do not engage, directly or indirectly, in transactions prohibited by OFAC sanctions, such as dealings with blocked persons or property, or engaging in prohibited trade- or investment-related transactions.”

OFAC currently has 35 different sanctions in place, the most common being limitations on dealings with foreign governments, entire countries or geographic locations, and specifically listed individuals. According to the guidelines, OFAC has the authority to impose “substantial” civil penalties for noncompliance.

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