For what operations with cryptocurrency can you get into a foreign sanctions list and how to avoid it?
There are a number of sanctions lists that you can get into because you performed a transaction with cryptocurrency while in a specific geographical location (North Korea, Iran, Crimea). It can also happen if a transaction to your crypto wallet is made by a person already under sanctions or from blocked geolocation. This also includes transactions to an address included in the sanctions lists.
It is often simply impossible for an individual to keep track of such things, but blockchain analysis helps legal entities in this.
Responsibility for violation of sanctions
If sanctions are imposed by the United States, then
a civil penalty of up to 250 thousand US dollars or in the amount of two times the transaction value may be applied for their violation.
There may be a fine of up to 1 million US dollars and (or) a criminal penalty in the form of imprisonment for up to 20 years (§ 1705 sec. 50 of the US Code of Laws).
How not to get on the sanctions list?
For companies operating in the field of cryptocurrencies:
Yes! Hundreds of individuals and legal entities are included and excluded from the sanctions list every year. However, the delisting procedure is quite time-consuming, requires the development of internal documentation of the company, training of personnel, and fulfillment of other requirements in direct contact with the relevant government agencies.
It is often simply impossible for an individual to keep track of such things, but blockchain analysis helps legal entities in this.
Responsibility for violation of sanctions
If sanctions are imposed by the United States, then
a civil penalty of up to 250 thousand US dollars or in the amount of two times the transaction value may be applied for their violation.
There may be a fine of up to 1 million US dollars and (or) a criminal penalty in the form of imprisonment for up to 20 years (§ 1705 sec. 50 of the US Code of Laws).
How not to get on the sanctions list?
For companies operating in the field of cryptocurrencies:
- Implementation of a working Compliance program.
- KYC/ KYT/AML transaction tracking.
- Regular testing of implemented programs.
- Timely and effective staff training.
- Blocking sanctioned individuals and (or) legal entities.
- Immediate notification of transaction attempts by sanctioned addresses or persons within 10 days.
- Maintaining an annual transaction report.
- Total transaction monitoring. To date, it is automated but requires the introduction of expensive blockchain analyzer programs.
Yes! Hundreds of individuals and legal entities are included and excluded from the sanctions list every year. However, the delisting procedure is quite time-consuming, requires the development of internal documentation of the company, training of personnel, and fulfillment of other requirements in direct contact with the relevant government agencies.
