OFAC continues crypto crack down; FinCEN seeks comments on No Action Letters

June 2022 is now in full swing, which means the temperatures are heating up outside, people are having barbeques, and kids are beginning their summer vacations (including my six-year-old, who just finished kindergarten). It’s been a while since we’ve provided a roundup of BSA activity, so let’s look back at some recent actions by the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC). After all, who doesn’t like reading about BSA developments while lounging by the pool?

OFAC

We previously blogged about OFAC’s decision to add a virtual currency exchange, SUEX, to the specially designated nationals (SDN) list in September 2021. A second virtual currency exchange, Chatex, was also added in November 2021.

Continuing that trend, OFAC announced further actions to fight cybercrime in April 2022. First, OFAC announced that it was designating Hydra Market, which the press release described as “the most prominent Russia darknet market, and the largest darknet market left in the world.” As the press release describes, Hydra offered a marketplace for illicit goods and services, including ransomware (also known as “ransomware as a service”) and illegal drugs. Users of the marketplace preferred to transact in cryptocurrency because they believed it provided greater anonymity than other payment methods. The designation of Hydra means that it has now been added to the SDN list, and therefore U.S. persons are prohibited from engaging in transactions with Hydra and assets of Hydra in U.S. accounts must be blocked.

 

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