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Danger · High risk

Sanctions in an AML report

Addresses on government sanctions lists or owned by listed entities.

What it means

A sanctions label means the address belongs to a person, company or service that a government has put on a sanctions list — for example the US Treasury’s SDN list — or is controlled by one. Sanctions lists can name crypto addresses directly.

Why it is a risk for you as the recipient

In many countries it is illegal to deal with sanctioned parties at all, whatever the amount. Exchanges and payment companies treat even small exposure to sanctioned addresses as a stop sign: they can freeze the deposit, close the account or report it.

  • OFAC first published crypto addresses as identifiers of sanctioned persons on 28 November 2018.[1]
  • OFAC says sanctions obligations are the same whether a transaction is in digital currency or fiat, and that it may list specific crypto addresses on SDN entries.[2]
  • In August 2025 OFAC designated the exchange Grinex, which it described as a successor to the sanctioned exchange Garantex.[3]

Example situation

Illustrative scenario, not a real case. You sell USDT on a P2P board. The buyer’s address received part of its funds from an exchange that was later sanctioned. When you send those coins to your exchange account, the deposit is held and you are asked to explain the source.

What to do if it shows up in a report

  1. Do not accept further funds from that address.
  2. If the funds already arrived, do not move them through other wallets to “clean” them — that looks like evasion.
  3. Contact your exchange’s official support, explain what happened and keep the trade records.
  4. If the amount is significant, talk to a lawyer who knows sanctions law in your country.
A high risk score is a reason to look closer, not proof of a crime. A low score does not guarantee that an exchange or issuer will not freeze funds.

FAQ

Is a tiny percentage of sanctions exposure a problem?

It can be. Sanctions rules usually have no minimum amount, and exchanges often apply strict thresholds. Treat any sanctions exposure as serious.

Can I search the OFAC list myself?

Yes — OFAC runs a public Sanctions List Search. It includes digital currency addresses where OFAC has listed them, but an AML check also catches indirect exposure.

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Sources

  1. U.S. Department of the Treasury — Treasury Designates Iran-Based Financial Facilitators of Malicious Cyber Activity and for the First Time Identifies Associated Digital Currency Addresses (sm556) (28 Nov 2018). Checked 4 Nov 2026.
  2. U.S. Treasury, Office of Foreign Assets Control (OFAC) — OFAC FAQs: Questions on Virtual Currency (topic 1626) (19 Mar 2018). Checked 4 Nov 2026.
  3. U.S. Department of the Treasury — Treasury Sanctions Cryptocurrency Exchange and Network Enabling Sanctions Evasion and Cyber Criminals (sb0225) (14 Aug 2025). Checked 4 Nov 2026.