OFAC Sanctions
US Treasury sanctions that now reach crypto addresses, obligating platforms to block designated wallets.
OFAC (the US Treasury’s Office of Foreign Assets Control) administers economic sanctions, and it has extended them to crypto — publishing specific wallet addresses on its sanctions list that US persons and platforms are prohibited from transacting with. Exchanges screen against these lists and block designated addresses.
OFAC’s 2022 sanctioning of the Tornado Cash mixer was a watershed — the first time open-source code (rather than a person or entity) was effectively sanctioned, raising profound questions about sanctioning immutable software, later contested in court. For ordinary users, OFAC screening is why exchanges flag or freeze funds linked to sanctioned addresses, and why interacting with sanctioned protocols carries real legal risk. It marks the collision of state sanctions power with permissionless technology.