OFAC Crypto Enforcement: What It Means for Your Crypto Transactions

When you send crypto, you might think it’s just a digital transfer—but under OFAC crypto enforcement, the U.S. Office of Foreign Assets Control’s rules that block transactions involving sanctioned individuals, entities, or countries. Also known as crypto sanctions, it treats digital assets like cash with a paper trail. If your wallet ever interacted with a flagged address—even by accident—you could be frozen out of exchanges, blocked from withdrawals, or flagged for investigation.

OFAC doesn’t just target criminals. It goes after exchanges that don’t screen users, DeFi protocols that ignore wallet blacklists, and even individuals who send crypto to people in Russia, Iran, or North Korea. The crypto sanctions, list of prohibited addresses maintained by OFAC and updated weekly. Also known as Specially Designated Nationals (SDN) list, it now includes over 1,000 crypto addresses tied to ransomware gangs, mixers, and state-backed hackers. Platforms like AscendEX, Xena Exchange, and InfinityCoin Exchange have been hit because they didn’t block these addresses. Even if you didn’t know the address was banned, the system doesn’t care—your funds can vanish overnight.

It’s not just about avoiding bad actors. OFAC compliance, the process of screening transactions against OFAC’s list before they go through. Also known as crypto AML checks, it’s now mandatory for any exchange serving U.S. customers or handling dollar-denominated transactions. If you’re using a non-U.S. exchange like AscendEX or Xena, you might think you’re safe—but if you ever used a U.S. bank, a U.S.-based wallet, or even a U.S. IP address, you’re still in scope. The rules don’t care where you live. They care where your money flows.

And it’s getting tighter. In 2024, OFAC started targeting blockchain analytics firms that help criminals hide transactions. They’re also pressuring DeFi protocols to build automated filters. Projects like Privix New and Sensi, which claim to offer privacy, are now under scrutiny—not because they’re illegal, but because they make it harder to track who’s sending what. If you’re holding tokens tied to unregulated, anonymous platforms, you’re not just taking a financial risk—you’re risking legal exposure.

Meanwhile, cross-border crypto payments in Russia, like those covered under Federal Law 221-FZ, are directly at odds with OFAC. Russia allows crypto for international trade, but OFAC sees that as sanctions evasion. If you’re a non-resident Indian sending crypto to a Russian business—or vice versa—you’re walking a legal tightrope. No exemptions. No gray areas. Just penalties.

What you’ll find here are real cases—like the InfinityCoin Exchange collapse after failing OFAC checks, the legal battles over crypto as property in court, and how DePIN projects are adapting to avoid sanctions. These aren’t theoretical risks. They’re happening right now. And if you’re using crypto, you need to know how to protect yourself—not just from scams, but from the regulators watching every transaction.