The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) is evidently showing greater interest in crypto regulation. The tax authority, which is one of the top three regulatory bodies of its kind in the United States, makes Bitcoin & Co. a top priority. The change of course of the foreign trade authority points to a general rethinking in the US Treasury.
The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) wants to pay more attention to crypto topics. This emerges from a document that appeared on August 13 on the news page Mondaq . In it, experts put the Authority’s interest in the regulation and legal classification of cryptocurrencies in the United States.
The OFAC is a US state agency which, on behalf of the Ministry of Finance, researches and implements targets for possible sanctions. For example, it is responsible for isolating sanctioned countries from international banking. In 2017, the OFAC oversaw some 5,800 people and organizations.
Where does OFAC’s course change come from?
In fact, the OFAC did not signal interest in crypto regulation until relatively late, in January 2018. The document states:
While the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) are pursuing aggressive regulatory approaches that resulted in high-stakes settlements, OFAC has been slower so far.
This should change now however definitively. One of the reasons for the increasing prioritization of Bitcoin & Co. is the increasing use of ICOs (Initial Coin Offerings) in recent years.
At that time, it was first the news of Venezuela’s release of its own cryptocurrency named Petro , which first called the agency to the scene. Subsequently, she published on her website a FAQ, which warned US citizens against legal consequences, should they carry out transactions with the Petro. Later, she extended these threats to the entire crypto industry.
Now the OFAC goes a step further and appoints Bitcoin & Co. as its key priority. Apparently, the agency collects information from a dozen crypto exchanges. At least one of them has even received a summons. It remains unclear which regulatory measures the agency specifically aspires to and what it intends to do with the information collected in the long term. It would be conceivable that she shared the data with the SEC and other authorities to advance internal investigations.
The new OFAC policies may allow crypto exchanges to put more emphasis on AML (anti-money laundering guidelines) and know-your-customer (KYC) processes. So they escape a possible prosecution by US regulators.
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