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Treasury Guidance Seeks to Advance Sanctions Compliance in Virtual Currency Industry

The Department of the Treasury’s office of foreign assets control issued guidance in October to promote compliance with sanctions requirements and due diligence best practices in the virtual currency industry.

OFAC said technology companies, miners, wallet providers, exchangers, administrators and other operators in the virtual currency industry play a key role in keeping sanctioned persons from exploiting digital currencies to undermine national security and U.S. foreign policy interests.

In addition to providing an overview of sanctions requirements and best practices for the virtual currency industry, the brochure from OFAC will help industry stakeholders evaluate sanctions-related risks in their lines of business; understand OFAC’s reporting, recordkeeping, enforcement and licensing processes; protect their business from sanctions violations and intentional misuse of virtual currencies by malicious actors; and establish a risk-based sanctions compliance program.

In mid-October, the White House National Security Council facilitated an international counter-ransomware event with more than 30 partner countries and one of the aims of the event was to address the financial systems that enable threat actors to profit from ransomware attacks.

A White House fact sheet shows that combating the abuse of virtual currency to launder ransom payments is one of the four lines of effort of the Biden administration’s counter-ransomware activities.

To advance this line of effort, the U.S. government continues to hold virtual currency exchanges accountable to regulatory requirements and has shared signs of misuse with the financial sector through the Financial Crimes Enforcement Network Exchange program and other venues.

In September, the Treasury announced the first sanctions designation against virtual currency exchange SUEX for its role in role in facilitating transactions for ransomware attackers.

POC - Digital Currency and National Security Forum

The Potomac Officers Club will hold its Digital Currency and National Security Forum on Jan. 27. Sign up for the virtual event to hear from government and industry leaders as they talk about the implications, risks, opportunities and challenges that digital currencies pose to the future of the U.S. economy and national security.

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