🔍 HM Treasury's OFSI has published a Cryptoassets Threat Assessment guide.
The UK’s Office of Financial Sanctions Implementation (OFSI) released a critical report highlighting threats to financial sanctions compliance in the cryptoasset sector.
Here are the key points:
1️⃣ **Sanctions Evasion Risks**: Since 2022, designated persons (DPs), particularly Russian and DPRK-linked actors, have increasingly used cryptoassets to bypass UK sanctions, exploiting blockchain’s pseudonymous nature.
2️⃣ **Russian Exposure**: UK crypto firms face significant risks from direct/indirect exposure to the Russian exchange Garantex (designated in 2023) and its successor, Grinex, which facilitates illicit transactions, including via Ruble-backed stablecoin A7AS5.
3️⃣ **DPRK Cyber Threats**: North Korean hackers, including groups like Lazarus, pose a severe threat, with high-profile thefts (e.g., $1.5B from Bybit in 2025) and sophisticated money laundering via mixers, DEXs, and no-KYC platforms.
4️⃣ **Iranian Activity**: Iranian crypto firms, like Nobitex, with suspected links to designated entities (e.g., IRGC), are facilitating sanctions evasion, often using AI-generated IDs to bypass KYC checks.
5️⃣ **Compliance Red Flags**: Indicators like large transactions post-sanctions, use of privacy coins, mixers, DEXs, or transactions from sanctioned jurisdictions signal potential evasion, requiring enhanced due diligence.
6️⃣ **Regulatory Oversight**: Crypto firms must register with the FCA, comply with the Travel Rule, and report suspected breaches to OFSI and SARs to the NCA, referencing “OFSI Cryptoassets Threat Assessment - 0725.”
7️⃣ **Call to Action**: UK cryptoasset firms are urged to strengthen compliance through robust due diligence, monitor for red flags, and review OFSI’s guidance and resources to mitigate risks.
💡 **Why It Matters**: With 7% of OFSI’s suspected breach reports since 2022 involving crypto firms, this report underscores the need for vigilance to protect the integrity of UK financial sanctions.
📌 Read the full report for actionable insights:
#CryptoCompliance #FinancialSanctions #OFSI #BlockchainSecurity
OFSI publishes Cryptoassets Threat Assessment guide | The British Blockchain Association posted on the topic | LinkedIn
🔍 HM Treasury
