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The U.S. Treasury Department Office of Foreign Assets Control ("OFAC") identified two Bitcoin digital currency addresses associated with Iranian nationals on the Specially Designated Nationals and Blocked Persons List. OFAC designated the two Iran-based individuals for their alleged role in facilitating the exchange of Bitcoin "ransom payments into Iran rial on behalf of Iranian malicious cyber actors" associated with the "SamSam ransomware scheme."
The designations mark the first time OFAC has publicly attributed digital currency addresses to designated individuals. In a press release, OFAC stated that the two addresses were used to process more than 7,000 transactions worth millions of U.S. dollars, including transactions involved in the ransomware scheme.
In two new FAQs, OFAC also described how to block and report digital currency associated with a sanctioned person, and how to explain blocking to an affected customer.
Commentary / Christian Larson
This development should come as no surprise. OFAC stated in March 2018 that it may include digital currency identifiers on the SDN List and that day is now upon us.
OFAC's designation is a reminder that Bitcoin is not anonymous, but instead "pseudonymous." The person behind a Bitcoin transaction may be unknown, but only so long as there is no link between the person and a particular digital currency address. Because the blockchain immutably records all transactions, the act of linking a person with an address makes that person's transactional history publicly available.
OFAC did not reveal how it associated the identified Bitcoin addresses with the Iranian nationals. But there should be no doubt that OFAC will continue to monitor the blockchain to see who (or at least which other digital currency addresses) transact with the addresses it identified.
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