General information only. CryptoRegHub provides summaries for informational purposes and does not constitute legal or compliance advice. Always verify with official sources and consult qualified legal counsel before making compliance decisions.
CryptoRegHub provides plain-English summaries of crypto regulations for informational purposes only. This does not constitute legal, compliance, or financial advice. Regulations change frequently — always verify information with official sources and consult qualified legal counsel before making any compliance decisions.
The US Treasury's Office of Foreign Assets Control (OFAC) administers and enforces economic sanctions. OFAC issued guidance specifically for the virtual currency industry in October 2021, making clear that US sanctions apply to crypto transactions in the same way as traditional financial transactions. In 2022 OFAC sanctioned Tornado Cash (a crypto mixer), the first time a software protocol was sanctioned — though the Treasury Department removed the Tornado Cash sanctions in 2025 following a court ruling that immutable smart contracts are not "property." Sanctions compliance is a strict liability matter for some violations — a company may face civil penalties even if it did not know it was dealing with a sanctioned person. The GENIUS Act reinforces OFAC obligations for stablecoin issuers, requiring technical capability to block, freeze and burn tokens on lawful sanctions orders.
Applies to all US persons (individuals and entities), all entities organised under US law, and all transactions that occur in whole or in part in the United States. Foreign subsidiaries of US companies and foreign entities with US nexus are also covered. Crypto exchanges, custodians, payment processors and stablecoin issuers all have OFAC obligations. Non-US exchanges with US customers must comply.
Key requirements: (1) Screen all customers at onboarding and on an ongoing basis against OFAC SDN (Specially Designated Nationals) list, Blocked Persons list, and consolidated sanctions lists. (2) Screen all transaction counterparties and wallet addresses against OFAC lists. (3) Block or reject transactions involving sanctioned parties. (4) File a report with OFAC within 10 business days of blocking a transaction (and annual reports thereafter). (5) Maintain records of all blocked transactions. (6) Implement risk-based controls — including blockchain analytics tools to identify wallets associated with sanctioned entities. (7) For stablecoin issuers under GENIUS Act: maintain technical capability to freeze and burn tokens at OFAC direction.
Always refer to official sources to confirm current requirements. CryptoRegHub summaries are for general guidance only.
Personal criminal liability including imprisonment
This summary is for general informational purposes only and does not constitute legal advice. Always verify with official sources and consult qualified legal counsel.