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ARTICLE · 13 SEPTEMBER 2019

Sanctions Law Implications For Virtual And Digital Currencies

With the increased use of sanctions as a foreign policy tool by western states, individuals and entities transacting with virtual and digital currency

CanadaTechnology

With the increased use of sanctions as a foreign policy tool by western states, individuals and entities transacting with virtual and digital currency,1 but especially virtual and digital currency service providers, should be aware of their sanctions obligations. Sanctioned individuals, entities and countries have warmed to the idea that such currencies may be used to bypass the global financial system, through which sanctions are imposed. Flagrant examples of sanctions evasion are causing regulators to pay increasing amounts of attention to virtual and digital currencies. 

Notwithstanding that the use of cryptocurrency to evade sanctions remains difficult to detect (given its decentralized nature, limited requirements of digital keys to process transactions, and frequently concealed identities), those who transact in such currency, or facilitate transactions, risk inadvertently dealing with a designated person and assisting prohibited activities in breach of their

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