© 2024 AnChain.AI. All Rights Reserved | Privacy Policy
Last week, the Justice Department launched its first criminal prosecution involving the alleged use of cryptocurrency to evade U.S. economic sanctions. The unnamed defendant allegedly transmitted more than $10 million worth of bitcoin to a virtual currency exchange in one of a handful of countries sanctioned by the U.S. government: Cuba, Iran, North Korea, Russia, or Syria.
In the opinion, Judge Faruqui cited recent guidance from the Treasury Department’s Office of Foreign Assets Control (OFAC), which stated that sanctions regulations apply equally to transactions involving virtual currencies as those involving the U.S. dollar or other traditional fiat currencies.
Earlier this month, OFAC issued its first sanctions against a cryptocurrency mixer, Blender.io, for its links to North Korean hackers. Blender is a virtual currency mixer that has helped obscure the trace of more than $500 million worth of Bitcoin since 2017.
The U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers and enforces economic sanctions which prohibit transactions with any individuals and organizations listed on the OFAC website as “Terrorists” and “Specially Designated Nationals and Blocked Persons,” as well as listed embargoed countries and regions.
As the name suggests, a “mixer” mixes cryptocurrency received from users before transmitting it to their ultimate destinations such that it obfuscates the origin and destination of the funds. While the purpose of a mixer is to increase users’ privacy, illicit actors have been using mixers to help facilitate money laundering of virtual currency as mixers could obscure the origin and destination of the funds.
Blender.io was sanctioned for its involvement in laundering illicit proceeds from a sanctioned entity known as the Lazarus Group. On March 23, 2022, Lazarus Group, a North Korean state-sponsored cybercriminal group sanctioned in 2019, carried out the largest cryptocurrency heist to date, worth $620 million, from a blockchain project linked to the online game Axie Infinity; Blender.io was used in processing over $20.5 million of the illicit proceeds.
All individuals and entities within the U.S. must comply with the regulations by checking the OFAC Sanctions List on an ongoing basis to ensure that both your potential and existing customers are not prohibited individuals or organizations and are not from embargoed countries or regions before engaging in any transactions with them.
“The Department of Justice can and will criminally prosecute individuals and entities for failure to comply with OFAC’s regulations, including as to virtual currency,” Judge Faruqui said. The consequences of violating OFAC regulations can be substantial, in this case, criminal prosecution by the Justice Department, regardless of whether you were aware of or had intentions to violate the law. Thus, it’s critical for you to take steps to protect yourself from potential consequences, including but not limited to sanctions and substantial monetary loss.
Yes! We understand that it is a time-consuming process to identify and check for potential exposures to individuals or entities on the sanctions list. Henceforth, AnChain.AI developed CISOTM OFAC Search, a new feature built into our blockchain investigation tool that helps you quickly screen for potential OFAC sanction exposures on individuals and entities in a single search. Our database is automatically synchronized with the latest updates published by the OFAC so that you are always protected and comply with any sanctions posed by the government.
In addition, you can view the risk profile and conduct blockchain investigations on each of the digital currency addresses associated with the sanctioned individual or entity.
Get in touch to learn more about how we can help.
© 2024 AnChain.AI. All Rights Reserved | Privacy Policy
