OFAC (Office of Foreign Assets Control)

The Office of Foreign Assets Control is a financial intelligence and enforcement agency of the U.S. Department of Treasury that administers and enforces economic sanctions programs targeting countries, regimes, terrorists, narcotics traffickers, and other threats to U.S. national security and foreign policy.

OFAC maintains the Specially Designated Nationals and Blocked Persons List (SDN List) identifying individuals, entities, and assets subject to blocking and transaction prohibitions. U.S. persons and entities must screen transactions, customers, and counterparties against OFAC lists and block assets of designated persons. Violations can result in civil penalties up to the greater of twice the transaction value or $250,000 per violation, plus criminal penalties including fines and imprisonment.

In crypto enforcement, OFAC has sanctioned cryptocurrency addresses associated with ransomware groups, North Korean state-sponsored hackers, Russian darknet markets, and mixing services including Tornado Cash in August 2022. Crypto exchanges and wallet providers must implement real-time sanctions screening using blockchain analytics tools to identify and block transactions involving sanctioned addresses. OFAC's crypto sanctions create compliance challenges since blockchain addresses are permissionless and transactions can route through multiple wallets, requiring continuous monitoring of transaction chains and counterparty wallet histories. Sanctions apply extraterritorially to any transaction touching U.S. financial systems or involving U.S. persons regardless of geographic location.