Sanctions enforcement affecting the cryptocurrency industry has intensified rapidly in the past two years, according to a new report by crypto compliance consultancy Elliptic.

  • Elliptic notes in its report, entitled “Sanctions Compliance in Cryptocurrencies: Using Blockchain Analysis to Navigate the Minefield”, that since May 2019, the US Department of the Treasury’s Office of Foreign Assets Control has undertaken five major law enforcement actions involving sanctions and “threat actors” using cryptocurrencies.
  • It says that in December 2020 and February 2021, OFAC issued civil enforcement penalties against crypto businesses for sanctions violations, representing a warning to the sector that breaches would be punished, and presaging a tightening of compliance requirements.
  • Elliptic says in its report that cryptocurrency wallets listed on OFAC’s Specially Designated Nationals and Blocked Persons List have received a total of more than US$175 million in Bitcoin and Ether to date.
  • The report highlights a number of trends and issues in the crypto space that it says compliance practitioners should be aware of, including: new techniques of sanctions invasion in crypto, including the use of privacy coins and decentralized exchanges; sanctions risks associated with crypto mining; pre-transaction wallet screening’s position as an essential component of any crypto sanctions compliance framework.