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May 03, 2018
FCMs and IBs should review OFAC FAQs addressing virtual currency transactions
The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) published five digital currency-related frequently asked questions (FAQs) addressing OFAC compliance obligations for virtual currency transactions. These FAQs define terms commonly associated with virtual currency (e.g., digital currency wallet, digital currency address, etc.) and set forth the OFAC compliance obligations for digital currency transactions as well as OFAC sanctions for those who use digital currency for illicit transactions. The FAQs also explain that OFAC may add digital currency addresses associated with blocked persons to its List of Specially Designated Nationals and Blocked Persons (SDN List), and that firms will be expected to consult the SDN List to identify digital currency identifiers or wallets that they believe are owned by an SDN.
NFA Member futures commission merchants (FCM) and introducing brokers (IB) should review the OFAC FAQs (Topics 559-563) to ensure that their AML programs address OFAC regulatory obligations as they relate to virtual currency transactions and the use of digital currency wallets.