OFAC Sanctions And Digital Assets: Regulation, Compliance, And Recent Developments

Introduction

In recent years, economic sanctions have become an increasingly important U.S. foreign policy tool and the digital asset industry has become a key focus of sanctions regulators and prosecutors. Regulators and courts have been clear that U.S. economic sanctions laws apply to digital assets, but a number of questions remain regarding the application of economic sanctions to certain digital asset contexts, and the nature of blockchain technology can create complex compliance challenges that are not present in the fiat context.

This chapter provides a high-level background on U.S. economic sanctions generally and then discusses how those sanctions have been applied to digital assets. It also provides a summary of key sanctions enforcement actions in the digital asset industry and discusses compliance expectations and challenges specific to the industry.