U.S. Office of Foreign Assets Control: Crypto Regulatory Body

The U.S. Office of Foreign Assets Control (OFAC) is the financial intelligence and enforcement agency of the U.S. Department of the Treasury.

What is the U.S. Office of Foreign Assets Control (OFAC)?

The U.S. Office of Foreign Assets Control (OFAC) is the financial intelligence and enforcement agency of the U.S. Department of the Treasury. Its primary mission is to create, publish and make public the Specially Designated Nationals or Blocked Persons List (SDN), which is a list of individuals or entities controlled by the country to combat them. OFAC is tasked with imposing economic and trade sanctions on members of this list.

These individuals and countries include terrorists, drug traffickers, or participants in foreign aggression. Sanctions can also be imposed for other illegal activities, such as cyber terrorism. In case of violations, assets are blocked and U.S. citizens are prohibited from interacting with them. In emergency situations, sanctions are approved by Congress or the President of the United States.

Since 2021, OFAC has begun cracking down on cryptocurrency activity by investigating transactions of leading digital asset exchange Coinbase, fining companies such as BitPay, and warning firms that help victims of extortion pay the abusers that they could be punished.

In addition, OFAC can impose sanctions based on United Nations mandates. The SDN list for 2021 includes the Balkans, Zimbabwe and Russia in connection with the 2014 occupation of Crimea.

OFAC was originally created in 1950 when China entered the second Korean War. Then U.S. President Harry Truman declared it an emergency and froze all Chinese and Korean assets under U.S. jurisdiction.

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