In August 2022, the Office of Foreign Assets Control (OFAC) of the United States Treasury Department sanctioned a cryptocurrency “mixer” – programmes used to increase the anonymity of crypto transactions – for its alleged use in money-laundering. It also blacklisted a number of Ethereum addresses associated with the protocol. The sanctioning and the corresponding response by affected actors stirred up intense debate in cryptocurrency circles and beyond about how permissionless protocols should be regulated. The OFAC administers trade and economic sanctions on countries and persons (both natural and legal) involved in activities that threaten the security or financial stability of the US – such as terrorism, drug trafficking and money-laundering. One of its primary tools is the Specially Designated Nationals and Blocked Persons List (SDN): a list of its sanctioned individuals and legal entities. Sanctioned persons have their assets under US jurisdiction frozen, and US persons are, in general, prohibited from dealing with sanctioned persons. By walling off sanctioned persons from the US financial system, it becomes very hard for such persons to do international business, especially so while transacting in USD.
About OODA Analyst
OODA is comprised of a unique team of international experts capable of providing advanced intelligence and analysis, strategy and planning support, risk and threat management, training, decision support, crisis response, and security services to global corporations and governments.