OFAC Enforcing Sanctions: Clear Declaration Against CryptoBTC Casino / 7th December 2018
The Securities and Exchange Commission (SEC) has thought long and hard on the topic of sanction-evading cryptocurrencies. Enforcing US securities laws has always been a priority. Recently, there have been key developments on the issue of applying United States sanctions laws by the Treasury Department’s Office of Foreign Assets Control (OFAC).
Last month, two Iranian citizens were sanction for attacks against United States-based networks. For the first time in history, the two Iranians were targeted by OFAC. OFAC also targeted the crypto addresses associated with the attackers.
This is a declaration to the crypto industry: If sanction laws aren’t abided, the price will be paid.
Over the last few years, there has been a lot of talk about United States sanctions. A lot of countries have been affected, Turkey, Venezuela, North Korea, Iran, Syria and of course Russia. The sanctions also affect certain people and companies.
OFAC FAQs need to be read carefully
There is one important note about the sanctions and their mentioning of “US persons”. The sanctioned people, governments or companies cannot transact with US persons. This is a term which is not limited to United States citizens. It also takes into consideration US citizens from around the world and companies incorporated under United States law. This even includes the foreign branches of the companies.
While sanctions can be varying in their strength, some are considered almost absolute. Those sanctions completely prohibit almost all transactions, like the case of Iran. The punishment for most sanctions is treated as a civil/criminal offense and is often punished by a huge fine.
OFAC however, doesn’t impose compliance obligations. The regulatory agency instead oversees a liability regime, which affects even unintentional sanction violations. This who process is extremely confusing for most companies and OFAC regularly publishes a variety of policy statements, FAQs and press releases. The agency also offers compliance suggestions for stakeholders in some industries.
OFAC has however, been very silent on the topic of cryptocurrencies. Due to the relatively new and unique nature of the asset, many other agencies have speculated on the rise and fall of cryptocurrencies and their relation to the US law.
Back in March, OFAC took a fast response against the Venezuelan government’s launch of the Petro. OFAC completely prohibited any US citizens from having any sort of interaction with the newly-released asset. There was also a lot of FAQs and additional information released due to the complexity of the issue.
October saw the US government’s decision to withdraw from the Iran nuclear deal and impose further sanctions against Iran. This was followed by Treasury Department issuing an advisory warning for all businesses about the Iranian regime’s efforts to fund illicit activities abroad. The advisory had a lot of information about the regime’s counterfeiting currency and transacting in digital currencies.
With OFAC becoming more involved in the crypto-scene, it’s only a matter of time before newer and stronger crypto sanctions come into being. The US government is issuing sanctions left and right when it comes to North Korea, Iran and Venezuela.
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