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What are sanctions in crypto?
Sanctions are government measures that block the property of, or ban dealings with, listed people, entities, countries or regions. In the US, OFAC administers them, and its rules apply equally to virtual currency and to dollars: US persons generally cannot deal, directly or indirectly, with anyone on its SDN List.
What it means for you
In the US, a business that finds it holds crypto in which a sanctioned person has an interest must block it — deny everyone access — and report it to OFAC within 10 business days. OFAC civil penalties generally follow strict liability, so a violation can be penalised even without knowledge; OFAC's guidance describes screening customers and their locations, which can lead to a frozen account.
How it works
OFAC administers more than 35 sanctions programs, comprehensive or targeted. Its 50 Percent Rule treats any entity owned 50 percent or more by blocked persons as blocked, even if it is not listed. US persons — citizens and permanent residents wherever located, anyone in the US, and US-organized entities with their foreign branches — must comply. Blocked virtual currency need not be converted to dollars or held in an interest-bearing account, but must be reported within 10 business days and then annually while blocked. Records are kept for five years. OFAC's 2021 guidance for the virtual currency industry describes geolocation and IP-blocking controls.
Source: OFAC: Sanctions Compliance Guidance for the Virtual Currency Industry · checked 4 October 2026
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