The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has added two crypto addresses to the Specially Designated Nationals (SDN) list. The addresses belong to two Iranians who are accused of helping exchange bitcoin into Iranian rial on behalf of hackers conducting a ransomware scheme. The scheme conspired to take over networks of institutions, such as hospitals and universities, and demanded payment in bitcoin. OFAC said they had identified 200 known victims.
Assets belonging to people included in the SDN list are blocked and U.S. persons are prohibited from dealing with such individuals. According to the federal agency, the two blocked addresses recorded 7000 transactions in bitcoin worth millions of dollars. “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,” OFAC stated in a release.
Bitcoin and cryptocurrencies have achieved infamy as being favored tools for anti-money laundering (AML) and other criminal activities. Whilst there have been reports of bitcoin being used to finance terrorist organizations earlier, this is the first instance of federal authorities targeting crypto addresses traced to criminals.
Meanwhile, cryptocurrency exchanges worldwide have already fallen in line with the federal government’s diktat. Hong Kong-based exchange Binance advised users in Iran to withdraw funds from their accounts earlier this month in order to comply with U.S. sanctions against their country. BitMex and Bittrex banned Iranian users in the last year.
“As cryptocurrency businesses launch and expand their offerings, they need to have controls to review high-risk customers, transactions and geographic locations. It is important for the industry to work closely with Treasury and law enforcement as they continue to assess the most effective way to oversee the use of sophisticated technologies to track and stop Illicit actors,” stated John Beccia, founder of FS Vector, a crypto compliance and strategy consulting firm.