OFAC (Office of Foreign Assets Control)
Web3 / regulatory frameworks
The Office of Foreign Assets Control is a financial intelligence and enforcement agency of the US Treasury Department that administers and enforces economic and trade sanctions based on US foreign policy and national security goals. OFAC maintains the Specially Designated Nationals (SDN) list — a roster of individuals, companies, and entities whose assets are blocked and with whom US persons are generally prohibited from dealing. Any entity added to the SDN list is effectively cut off from the US financial system, which in practice means cut off from USD liquidity globally.
In the crypto sector, OFAC has been the most consequential sanctions authority. Key actions include: the designation of Tornado Cash (2022), the first sanctioning of a smart contract protocol; the designation of Garantex (2022, re-sanctioned 2025 following reconstitution as Grinex); and the designation of A7A5 stablecoin infrastructure. OFAC has also issued guidance making clear that US persons must block transactions involving SDN-listed cryptocurrency addresses, requiring exchanges and custodians to implement real-time wallet screening against OFAC's published address lists.
Following the UK FCDO's designation of Huobi Global S.A. and 18 A7 network entities in May 2026, OFAC action on the same entities is widely anticipated by compliance analysts — FCDO and OFAC designations have historically moved in sequence within weeks of each other.
Why It Matters
OFAC's extraterritorial reach — any transaction touching USD or a US person — makes its SDN list the de facto global sanctions standard for crypto. Non-US exchanges that process transactions involving SDN-listed wallets risk secondary sanctions exposure, effectively locking them out of US correspondent banking and USD markets. All compliance desks must screen against OFAC's published crypto address lists as a baseline obligation.
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