Global Trade & Foreign Policy Insights

On August 8, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced its second-ever designation of a virtual-currency mixer—Tornado Cash (“Tornado”)—which was used to launder several billion dollars’ worth of virtual currency, including funds stolen by a North Korean state-sponsored hacking group.

In response to Russia’s invasion of Ukraine, the United States and dozens of its allies and partners around the globe have imposed what the White House has called “the most impactful, coordinated, and wide-ranging economic restrictions in history.”[1] Although Russia is still not subject to a complete embargo in the United States, the sanctions placed on Russia have been severe and targeted against individuals and entities (“persons”) operating in some of its most important sectors, such as the financial sector.[2]

There is no doubt that United States regulators and government agencies have been paying close attention to the virtual currency industry over the past several years. In the past few months, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued two publications highlighting its growing focus on the virtual currency industry