OFAC and the SDN List Explained: What Crypto Users Need

What is OFAC, and which department oversees economic sanctions?

The Office of Foreign Assets Control (OFAC) is part of the US Department of the Treasury, within Treasury’s Office of Terrorism and Financial Intelligence. It administers and enforces economic and trade sanctions in response to threats to US national security, foreign policy or the economy. Sanctions can block the property of specific people and companies, or broadly restrict dealings with a country, region or sector of an economy.^[1]

So when someone asks “OFAC is a division of what agency?” — the answer is the Treasury. OFAC’s sanctions bind all US persons: US citizens and permanent residents wherever they are, anyone in the United States, and US-incorporated companies and their foreign branches. The exact definitions sit in each program’s regulations in 31 CFR chapter V.^[2]

What is a sanctions list?

A sanctions list is a published register of people, companies, vessels and other targets that a government restricts. OFAC’s sanctions are partly list-based — they apply to named entries — and partly country- or region-wide. This guide is about the lists; for countries see OFAC-sanctioned countries and crypto.

OFAC publishes two families of lists:^[3]

	SDN List	Consolidated (non-SDN) lists
Full name	Specially Designated Nationals and Blocked Persons List	Separate lists such as the Sectoral Sanctions Identifications (SSI), Foreign Sanctions Evaders (FSE), CAPTA, NS-MBS and NS-CMIC lists[4]
Effect	Property under US jurisdiction is blocked; US persons generally may not deal with the listed person	Narrower, “non-blocking” restrictions that depend on the program
Typical crypto use	Where crypto addresses of designated people and services are published	Rarely relevant to an ordinary wallet check

OFAC states, for example, that the SSI List is not part of the SDN List.^[4]

Specially Designated Nationals list: definition

An “SDN” is a person or entity on the SDN List. In OFAC’s words, the property and interests in property of the individuals and entities on the list are blocked when they are in the United States or controlled by US persons, and US persons are generally prohibited from dealing with them.^[3] The list also covers vessels and aircraft that OFAC has blocked.^[5]

A listing is not the only trigger. Some sanctions block whole categories of persons even if they do not appear on the SDN List — including entities caught by the 50 Percent Rule.^[3]

The 50 Percent Rule

Any entity owned 50 percent or more, directly or indirectly, in the aggregate, by one or more blocked persons is itself blocked. Stakes of persons blocked under different programs are added together. The rule is about ownership only: an entity that a blocked person controls but owns less than 50% of is not automatically blocked, though OFAC may designate it separately.^[6] In practice, a company can be blocked without its name appearing anywhere on the list — which is why name screening alone is not enough for businesses.

What “blocked” means — and who blocked funds belong to

Blocking is a freeze, not a seizure. Title to blocked property stays with the blocked person, but nobody may transfer, withdraw or otherwise deal in it without OFAC’s authorization. Whoever blocks property must report it to OFAC within 10 business days.^[7]

For crypto, OFAC says a US person holding blocked virtual currency must deny all parties access to it, report it within 10 business days and then annually; it does not have to be converted into dollars. A platform may tell its customer that it blocked their coins, and the customer can apply to OFAC for a licence to release them.^[8]

How crypto addresses appear on the SDN List

OFAC may add digital currency addresses to an SDN entry as identifiers. Each address gets its own field, labelled with the currency, for example “Digital Currency Address - XBT”. OFAC warns that these address lists are not likely to be exhaustive.^[8] Examples, history and the full list format are in our post on OFAC-sanctioned crypto addresses; for exchanges, see Garantex and Grinex, and for how a listing can end, Tornado Cash delisted.

How to search the OFAC list

OFAC’s free tool is Sanctions List Search.^[10] It covers both the SDN List and the Consolidated list, and its name field uses fuzzy matching. The full data files can be downloaded from the Sanctions List Service.^[5]

1. Searching a name: enter it in the name field. Fuzzy logic returns near matches, so a hit is not a confirmed match.
2. Searching a crypto address: paste it into the ID # field. That field has no fuzzy logic — only an exact match comes back.^[8]
3. Checking a hit: OFAC’s own steps are to see which list the hit is on, then compare the full entry — date of birth, nationality, ID numbers, address. Very few similarities usually means no match; several matching details means a likely one. OFAC does not confirm matches for you.^[9]

The limit for crypto: OFAC lists only the addresses it names. A wallet that received coins from an SDN address yesterday will not show up. That is the gap AML checkers fill.

What this means for an ordinary crypto user

• If you are a US person, sanctions obligations are the same in crypto as in dollars.^[8] Paying or receiving from an SDN can be a violation whatever the amount; penalties can be civil and, in some cases, criminal.^[11]
• If you are outside the US, your exchange, wallet provider or stablecoin issuer may still apply the SDN List. A deposit linked to an SDN address can be held or frozen — see exchange deposit holds and recorded freezes.
• AML checkers flag it as “sanctions”. Most checkers load SDN addresses and then trace exposure: how much of a wallet’s funds came from or went to them. A direct or large sanctions share is the most serious result you can get. See the sanctions risk category and what an AML risk score means.

What to do: a short checklist

1. Before receiving, check the sender’s address with an AML checker — the free ones are enough for a first look. For stablecoins, follow how to check USDT before receiving.
2. For an exact hit, search the address in Sanctions List Search (ID # field).
3. If there is any sanctions exposure, decline the deal. Don’t pass the coins on and don’t send them back through other wallets.
4. If your funds are already blocked, keep every record and work through the platform’s official support; the route to release is an OFAC licence application. Talk to a sanctions lawyer.
5. If you run a business, name and address screening is the start, not the end. See crypto sanctions screening, wallet screening and tools for businesses.