OFAC Releases Guidance on Cryptocurrency

April 06, 2018

The U.S. government has recently been active with respect to regulating cryptocurrencies. For its part, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) recently released guidance—issued in the form of Frequently Asked Questions (FAQs)—explaining that transactions involving cryptocurrencies, also known as virtual or digital currencies, will be treated the same as other transactions—a position that multiple Treasury Department officials have signaled  for several months.

Notably, OFAC’s guidance was announced contemporaneously with President Trump’s Executive Order prohibiting transactions related to virtual currencies issued by, for, or on behalf of the Venezuelan government. Venezuela issued the “petro” in February 2018, a cryptocurrency that U.S. officials said was created to evade U.S. sanctions against the country. Venezuela’s actions, and the U.S. response, show that the U.S. government is focused not just on sanctions violations involving traditional financial transactions, but also on the emerging use of digital currencies, including those issued by foreign governments.

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