On October 15, 2021, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) released guidance on sanctions compliance for the digital currency industry, the agency’s most detailed statement to date on its expectations for participants in this rapidly growing industry. This guidance expands on the five pillars of OFAC’s 2019 Framework by specifying best practices for implementing a sanctions compliance program (SCP) program for participants in the digital currency industry. While the guidance provides helpful clarity for the digital currency industry on key sanctions compliance challenges, unaddressed issues nevertheless remain.
In the following update sent today, we briefly summarize OFAC’s guidance, highlighting practical implications for both digital currency companies and customers. Regarding the scope of OFAC’s guidance, it defines the digital currency industry to include not just exchangers and administrators, but also wallet providers and, notably, technology companies and miners.