On Friday, the U.S. Treasury Department’s Office of Foreign Assets Control issued new guidance clarifying that U.S. citizens, as well as digital asset firms, must comply with sanctions against Russia. This applies even when they facilitate transactions in cryptocurrency.
OFAC stated in its guidance that both individuals and businesses dealing in cryptocurrency in the United States must be vigilant against attempts at circumventing OFAC regulations. They should also “take risk-based measures to ensure that they don’t engage in prohibited transactions.”
This warning comes as many within the crypto industry respond to concerns raised by some lawmakers that digital assets could be used in order to bypass Western sanctions following Russia’s invasion of Ukraine.
Officials from the Biden administration have stated that they don’t believe Russia could use cryptocurrency to bypass sanctions completely but are still cautioning companies to be vigilant.
Financial Crimes Enforcement Network (FinCEN), which issued guidance Monday, stated that crypto exchanges should report suspicious activity. Friday’s notice however goes further, stating clearly that illegal transactions are not allowed.
Coinbase and Binance are the major crypto exchanges. They have not responded to calls to ban Russian users as some Ukrainian officials had requested.