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US to digital currency exchanges: Use sanctions to prevent sanctions


The US Office of Foreign Assets Control (OFAC) issued a statement yesterday issuing guidelines for companies operating in the field of digital assets.

to the Report La 360, in these guidelines, while pointing out the requirements that companies operating in this field must comply with, also offers suggestions to avoid falling into the trap of sanctions. According to OFAC, related companies should use tools to locate users and block IP addresses of sanctioned countries. These companies can also use analytical tools to detect and track any IP changes and use them to carry out suspicious activity.

OFAC launched a program in 2018 that compiled a list of virtual currency addresses associated with specific countries and individuals on the blacklist. Other addresses that interact with blacklisted addresses or share addresses with blacklisted addresses may be subject to sanctions, it said.

The US Treasury Department’s guidelines will be released shortly after the country added a foreign exchange to its blacklist. According to reports, 40% of the exchange’s transactions, called SUEX, involved interactions with suspects and criminals.

The US Department of Justice has recently formed a team to deal with digital currencies. The task of this team is to identify the people involved in ransomware and money laundering attacks through digital currencies. OFAC writes in a statement:

The digital currency industry is becoming increasingly important in preventing sanctioned people from using these currencies.

The guideline was published at the same time as the report of the US Financial Crimes Network from the first half of 2021. According to the network, more suspicious activities were recorded in the first half of this year, which is more than all the activities recorded last year. Blockchain analysis also shows that the volume of payments in digital currencies has increased dramatically.

Friday’s report cites 177 virtual currency wallets associated with various aspects of ransomware. According to the US Financial Crimes Network, about $ 5.2 billion of digital currency wallet outflows were actually ransom.

OFAC warns that not taking the risk of sanctions seriously could lead to negative actions. BitPay agreed to pay a $ 507,000 fine in February for accepting transactions from Iranian and North Korean citizens.

In December last year, OFAC received $ 99,000 from BitGo under an agreement. According to the agency, Bitcoin has not been able to prevent users of sanctioned countries from accessing their wallets. A part of OFAC’s announcement reads:

If the necessary measures are not taken seriously or their implementation is delayed, the risk of sanctions may lead to negative action and violation of the law, and as a result, US foreign policy and national security may be jeopardized.

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