U.S. sanctions and their impact on the cryptocurrency industry

Given the fact that governments around the world seek to regulate all aspects of the work of the cryptocurrency market, it seems that the risks of the impact of regulations on the industry are increasing every day. To this list we can add and US sanctions.

On 19 January, the Office for foreign assets control of the U.S. Treasury Department (OFAC), chief Executive of the authority for the sanctions in the United States, announced that any US person dealing with the planned launch of a state cryptocurrency Petro Venezuela, would violate us sanctions against Venezuelan government.

If we compare this statement with recent comments Stephen Mnuchin (Steven Mnuchin), Secretary of the Treasury, who warned that the government intends to ensure that bitcoin wallets to the new version of offshore accounts Swiss banks, it can be concluded that the Ministry of Finance has seriously decided to take up the regulation of cryptocurrencies.

Although the potential sanctions risks associated with cryptocurrencies, in some respects similar to the risks of money laundering and financing of terrorism, they represent a somewhat unique problem.

OFAC maintains a blacklist of individuals and entities prohibited from doing business with U.S. citizens, goods and services or financial system of the country. Direct violations of the sanctions or assisting others in the attempts to evade them can lead to financial and criminal penalties. Companies inside and outside the United States have sufficient incentives not to violate these rules and maintain compliance, but the anonymity provided by the cryptocurrency transactions makes it difficult.

However, if OFAC has set his sights on cryptocurrency, it is only a matter of time before it will set a precedent and punish those who broke his rules to intimidate other market participants. Moreover, open registries, the underlying cryptocurrency can allow the US government to investigate possible violations of sanctions by defining the details of a particular transaction and its participants.

The following is a summary of the implications for some of the players in the cryptocurrency industry that may be affected by the actions of OFAC.


Exactly the same as the exchange became the subject of increased state control in relation to fraud and other criminal acts associated with cryptocurrencies, they can also become a natural starting point in respect of the restrictive measures on the part of OFAC.

Most likely, lawmakers will first require exchanges to improve the transparency of operations. Since the problem situation, when exchange want to be transparent and anonymous at the same time, it becomes all the more urgent by the exchanges will have to fight for reconciling these competing interests and to preserve their niche in the market. Of the exchange, who prefer to ignore the risks associated with the sanctions could face serious consequences in the future.


Any sanctions risks affecting the exchange, will affect and cryptocurrency investors. Although the investors may not be subject to measures, OFAC, unless they know that the exchange violates US sanctions. Significant fines imposed on the exchange may lead to the freezing of assets or even bankruptcy of companies.

Reasonable cryptocurrency investors should definitely consider sanctions and other problems associated with adherence to state regulations, to identify the most trustworthy and reliable exchanges to implement its crypto operations.

Financial institution

Banks exposed to high risks when it comes to sanctions. At the end of last month, Nordea Bank AB, which operates in North Europe, has confirmed that it has banned
all of its employees to own and trade crypto-currencies because of the possible risks. Despite the ban, customers of Nordea are still allowed to buy crypto products through the company’s platform, although the Bank does not recommend to do it.

Recently it was also reported that some Australian banks have frozen the accounts of cryptocurrency traders and banned transfers of funds in multiple exchanges of bitcoin. In both cases, these protective effect, most likely due to problems of verification of contractors and the associated difficulties of law enforcement.

Regardless of the specific reasons for the policy change, the impossibility of verifying customers and counterparties and transactions with parties that fall under the sanctions is a problem that can lead to significant consequences for financial institutions.

Commercial enterprise

Since cryptocurrencies are gaining wider acceptance among businesses, especially those working in the field of electronic Commerce, these organizations will need to decide what measures are necessary to protect against the risks associated with violation of the sanctions.

Many U.S. companies have procedures in place to verify customers or counterparties located outside the United States to ensure the impossibility of sending American goods to the company or to the recipient under sanctions. But as a us company that accepts cryptocurrency as a means of payment, will monitor such transactions?

This question remains open, as it is unclear whether such audit procedures to be easily adapted to transactions involving cryptocurrencies. If the adaptation is too expensive or inefficient, the company can reassess the benefits of taking cryptocurrency payments and possibly just abandon them.

The state of cryptocurrency

There are many reasons to be skeptical of government bitcoin Venezuela Petro and Russian Scripturally, but the sanctions can be considered as the main ones.

Senior government officials in both countries publicly acknowledged that the planned issuance of government cryptocurrency is a response to US sanctions and an attempt to circumvent the dependence on the us currency in some industries.

As for Venezuela, OFAC has already made it clear that cryptocurrency this country banned for American citizens. It is possible that the same fate will befall scriptural if it will be released.

In addition, any persons who are not U.S. citizens who are considering investing in any currency, can potentially be branded as OFAC foreign sanctions violators, which will also make them subject to sanctions. But if you wish to use alternative to the dollar nowonline cryptocurrency will be much, it can begin to create the structure, independent of the sanctions pressure of the United States.

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