What has happened?
The Office of Foreign Asset Control (OFAC) has said it was considering including digital currency addresses to its Specially Designated Nationals (SDN) list.
What does this mean?
In an update to the FAQ section on its website, entitled "Questions about Virtual Currency", OFAC said that it "may add digital currency addresses to the SDN List to alert the public of specific digital currency identifiers associated with a blocked person".
The department, which is part of the US Treasury Department, noted that OFAC compliance obligations are the same irrespective of whether a transaction is carried out with traditional fiat currency or a virtual currency.
This means that virtual currencies are treated the same as fiat currencies in respect of the SDN List and that anyone subject to OFAC jurisdiction is "responsible for ensuring that they do not engage in unauthorized transactions prohibited by OFAC sanctions".
The SDN List comprises individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries.
It also lists individuals, groups and entities, such as terrorists and narcotics traffickers designated under programmes that are not country-specific.
The assets of those SDNs are blocked and US persons and organisations are generally prohibited from dealing with them.
"To strengthen our efforts to combat the illicit use of digital currency transactions under our existing authorities, OFAC may include as identifiers on the SDN List specific digital currency addresses associated with blocked persons," OFAC said.
The agency added that the address listings "are not likely to be exhaustive".
OFAC therefore advised:
"Parties who identify digital currency identifiers or wallets that they believe are owned by, or otherwise associated with, an SDN and hold such property should take the necessary steps to block the relevant digital currency and file a report with OFAC that includes information about the wallet’s or address’s ownership, and any other relevant details."
On the structure of the digital address on OFAC's SDN list, the agency said that the field provides the unique alphanumeric identifiers, which is up to 256 characters, and the name of the digital currency to which the address corresponds, such as bitcoin, ether or litecoin.
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