U.S. Treasury Department Includes Bitcoin Addresses in Sanctions List

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The Office of Foreign Assets Control (OFAC), the financial intelligence agency of the U.S. Treasury Department, has officially included cryptocurrency addresses to its Specially Designated Nationals (SDN) list.

In an announcement published Wednesday, OFAC stated that it was adding Iran residents Ali Khorashadizadeh and Mohammad Ghorbaniyan to its individual sanctions list, along with a number of identifying information associated with the individuals, including Bitcoin addresses, physical addresses, postal addresses, as well as email addresses and aliases.

The enforcement agency’s move to add crypto addresses was initially suggested back in March, when OFAC updated its sanction compliance FAQ page. As the agency emphasized, digital currencies are, to a certain extent, akin to fiat currencies as far as the sanctions list is concerned. As such, U.S. citizens are now prohibited from depositing funds to the addresses associated to the Iran residents.

As Treasury Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker detailed in a recently released statement, the department “is targeting digital currency exchangers who have enabled Iranian cyber actors to profit from extorting digital ransom payments from their victims.”

He went on explaining that:

“We are publishing digital currency addresses to identify illicit actors operating in the digital currency space. Treasury will aggressively pursue Iran and other rogue regimes attempting to exploit digital currencies and weaknesses in cyber and AML/CFT safeguards to further their nefarious objectives.”

The Iranian residents’ addition to OFAC’s SDN list resulted from their previous involvement in executing a number of financial transactions in relation to the SamSam ransomware, which has affected over 200 victims in the last two years, including government agencies, corporations, hospitals, as well as universities.

As the Treasury Department stated, the malicious software pilfered data from multiple organizations, which were then used by cybercriminals to extort Bitcoin from their victims.

Khorashadizadeh and Ghorbaniyan purportedly facilitated over 7,000 transactions and liquidated over 6,000 Bitcoin on behalf of the ransomware creators. Among these transactions included Bitcoin ransoms collected from the victims impacted by the malicious software.

After converting the digital assets into rials, the money were then deposited into a number of Iranian banks. As OFAC further added, the two suspects allegedly processed the transactions across over 40 digital currency trading platforms, including several anonymous U.S.-based crypto exchanges.

Concomitant with the announcement, the Treasury Department also cautioned U.S. citizens, stressing that those found to be sending funds to the Bitcoin addresses specified will be facing secondary sanctions, including being entirely banned from the U.S. financial system.

As Mandelker noted:

“As Iran becomes increasingly isolated and desperate for access to U.S. dollars, it is vital that virtual currency exchanges, peer-to-peer exchangers, and other providers of digital currency services harden their networks against these illicit schemes.”