US Dept. Of Treasury Could Add Crypto Wallets Of Sanctioned Persons To Blacklist

The US Department of the Treasury may begin adding digital currency addresses to its sanctions list if they can tie them to a sanctioned individual, according to a document issued March 19.

The Office of Foreign Assets Control (OFAC) may add digital currencies addresses and wallets to the Specially Designated Nationals And Blocked Persons List (SDN). The measure would, “alert the public of specific digital currency identifiers associated with a blocked person.”

The OFAC’s listings “are not likely to be exhaustive,” the document stated, “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’s ownership, and any other relevant details.”

The OFAC offers no single compliance solution, and suggests that the development of a tailored, risk-based compliance program falls upon individual companies, exchanges, and users of cryptocurrencies. The program mechanism looks similar to know-your-customer (KYC) procedure, which includes sanctions list screening and other relevant measures. US persons and firms will be responsible for ensuring they are not engaged in transactions prohibited by the sanctions or illicit trade and investment-related transactions.

The Treasury claims it will use sanctions to fight against criminal and malicious actors, which take advantage of digital currencies “as a complement to existing tools”:

“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.”

The document follows an Executive Order issued by President Trump on March 19, which bans the Petro, the Venezuelan government-backed cryptocurrency, and prohibits American investors from participating in the Initial Coin Offering (ICO) of the cryptocurrency.

Earlier this week, classified documents provided by Edward Snowden to The Intercept revealed that The US National Security Agency (NSA) managed to create a system to track down and deanonymize cryptocurrency users.