OFAC Sanctions
US Treasury sanctions, enforced by a watchdog office, that bar Americans from transacting with blacklisted people and addresses.
The Office of Foreign Assets Control keeps a list of sanctioned people and entities, and now wallet addresses. Dealing with anyone on it can trigger civil or criminal penalties, regardless of intent.
In 2022 OFAC sanctioned Tornado Cash, a crypto mixer, marking the first time it targeted autonomous code rather than a person or company. The move drew lawsuits over whether software can be sanctioned. A 2024 appeals ruling narrowed the action, finding immutable smart contracts are not "property" OFAC can block.
Related terms
The laws and procedures meant to stop criminals from disguising illicit money as legitimate funds.
KYC (Know Your Customer)The identity checks financial firms run to confirm who their customers are before opening accounts.
Financial Action Task Force (FATF)An intergovernmental body that sets global anti-money-laundering standards, including the crypto Travel Rule, for countries to adopt.
Smart ContractSelf-executing code on a blockchain that runs exactly as written when its conditions are met, with no party able to intervene.