OFAC Sanctions Screening for Crypto and DeFi: A Developer's Guide

OFAC Sanctions Screening for Crypto and DeFi: A Developer's Guide If you build on crypto rails, OFAC compliance is not optional. The Treasury Department has made this clear through enforcement actions, guidance documents, and the Tornado Cash precedent. This guide covers what you need to screen, how to screen it, and working code to integrate sanctions screening into a crypto or DeFi application. Why Crypto Platforms Must Screen Three things changed the compliance landscape for crypto: FinCEN guidance (2019). FinCEN clarified that virtual asset service providers (VASPs) -- exchanges, custodial wallet providers, and money transmitters dealing in crypto -- are money services businesses under the Bank Secrecy Act. That means the same OFAC obligations that apply to banks apply to you. If you facilitate a transaction involving a sanctioned person, entity, or wallet address, you are liable. OFAC's wallet address designations. Starting in 2018, OFAC began adding cryptocurrency wallet addresse