Cryptocurrency has risen in popularity in recent years for its promise of a more decentralized system and increased privacy in transactions. However, it has also been utilized for shady and illicit activities, like evading economic sanctions. According to Chainalysis, $20 billion in crypto transactions were related to such sanctions in 2020, a record high.
Governments and enforcement agencies are beginning to take notice and taking appropriate action. The US Office of Financial Asset Control (OFAC) is levying sanctions against offenders and has gone so far as to target cryptocurrency addresses linked to them. The UK has implemented regulations where crypto firms must report any breaches of financial sanctions imposed by OFAC. But additional regulatory measures can create possible repercussions for legitimate actors, as seen in the decision to sanction the software protocol, Tornado Cash.
Achieving greater compliance to economic sanctions involves collaboration between governments, regulators, and crypto exchanges. All parties need to take the necessary steps to curb the use of cryptocurrencies to evade economic sanctions without infringing upon the rights of legitimate crypto users. By combining regulation and intelligence methods, illegal usage of cryptocurrencies can be limited and more closely monitored.
Jaxon Chavez
- 2023-04-20
Curbing the Use of Cryptocurrency to Evade Sanctions
Governments and enforcement agencies are beginning to take notice and taking appropriate action to limit the illegal and illicit usage of cryptocurrencies to evade economic sanctions. Read on to learn how regulation and intelligence methods can be leveraged to monitor such activities.
