OFAC Issues Sanctions Compliance Guidance for Virtual Currencies


In October, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) published new guidance for the virtual currency industry focusing on compliance with the financial industry’s obligations related to U.S. economic sanctions.

OFAC administers and enforces economic sanctions against targeted and/or sanctioned foreign countries, geographic regions, entities, and individuals to further U.S. foreign policy and national security goals.

As noted in the new guidance, virtual currencies now playing an increasingly prominent role in the global economy. The growing relevance of virtual currency, both as an investment and as a payment method, brings greater exposure to sanctions risks. Specifically, there is an increased risk that a sanctioned entity or an entity in a jurisdiction subject to sanctions might use virtual currency as an alternative to fiat currency in an effort to avoid U.S. sanctions. As such, the OFAC guidance specifically targets technology companies, virtual currency exchanges, virtual currency administrators, virtual miners, digital currency wallet providers, and users.

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