OFAC Compliance
This page describes what OFAC is and which measures we have implemented to be OFAC compliant.
What is OFAC?
The Office of Foreign Assets Control (OFAC) is the office within the U.S. Department of the Treasury that is responsible for administering and enforcing economic sanctions against targeted foreign countries, geographic regions, entities, and individuals to further U.S. foreign policy and national security goals.
Economic sanctions are used by the U.S. government to prevent targets such as terrorists, international narcotics traffickers, weapons of mass destruction proliferators, and perpetrators of serious human rights abuse from accessing the U.S. financial system for purposes contrary to U.S. foreign policy and national security interests, and to change the behavior of such targets. In this way, among others, economic sanctions can be a powerful foreign policy tool, but the effectiveness of sanctions relies upon the active participation of everyone subject to U.S. jurisdiction, including those within the virtual currency industry.
Why OFAC compliance on virtual currencies?
Virtual currencies are beginning to play an increasingly prominent role in the global economy. The growing prevalence of virtual currency as a payment method likewise brings greater exposure to sanctions risks—like the risk that a sanctioned person or a person in a jurisdiction subject to sanctions might be involved in a virtual currency transaction. Accordingly, the virtual currency industry, including technology companies, exchangers, administrators, miners, wallet providers, and users, plays an increasingly critical role in preventing sanctioned persons from exploiting virtual currencies to evade sanctions and undermine U.S. foreign policy and national security interests.
OFAC sanctions compliance obligations apply equally to transactions involving virtual currencies and those involving traditional fiat currencies. Members of the virtual currency industry are responsible for ensuring that they do not engage, directly or indirectly, in transactions prohibited by OFAC sanctions, such as dealings with blocked persons or property, or engaging in prohibited trade- or investment-related transactions.
What are OFAC sanctions?
OFAC administers over 35 different sanctions programs—each designed to respond to specific threats and to further U.S. foreign policy and national security goals. As a result, the types of sanctions employed in each program may differ. Generally, OFAC sanctions can be either comprehensive or targeted in nature and can require the blocking of assets or impose restrictions on financial or trade-related activities with a specific person, country, region, or government.
The most comprehensive sanctions programs that OFAC administers typically include several or all of the following types of sanctions, while other sanctions programs may only employ some of these options:
Broad trade-based sanctions or embargoes
prohibit dealings with an entire country or geographic region, unless exempt or authorized. This type of sanction usually
includes a prohibition on importing or exporting goods or services to or from the sanctioned jurisdiction. Such sanctioned jurisdictions currently include Cuba, Iran, North Korea, Syria, and the Crimea region of Ukraine
Government or regime sanctions
either (1) require the blocking of all property and interests in property of a particular foreign government or regime that are or come within the United States or the possession or control of a U.S. person, or (2) prohibit specific types of transactions and activities involving a particular foreign government or regime.
List-based sanctions
target specific, listed individuals and entities and either (1) require the blocking of all property and interests in property of those listed persons that are or come within the United States or the possession or control of a U.S. person, or (2) prohibit specific types of transactions and activities with listed persons.
Sectoral sanctions
target individuals and entities operating in specific sectors of a foreign country’s economy or prohibit specific activities associated with a sector of a foreign country’s economy.
Who must comply with OFAC sanctions?
All U.S. persons are required to comply with OFAC regulations. This includes all U.S. citizens and lawful permanent residents, wherever located; all individuals and entities within the United States; and all entities organized under the laws of the United States or any jurisdiction within the United States, including any foreign branches of those entities. Accordingly, anyone engaging in virtual currency activities in the United States, or that involve U.S. individuals or entities, should be aware of OFAC sanctions requirements and the circumstances in which they must comply with those requirements.
Depending on the authorities governing each sanctions program, others may also be required to adhere to OFAC sanctions requirements. For example, OFAC’s Cuba, Iran, and North Korea sanctions programs extend sanctions prohibitions to certain foreign entities owned or controlled by U.S. persons or U.S. financial institutions. Certain activities by non-U.S. persons that involve the United States, U.S. persons, or goods or services exported from the United States may also be subject to OFAC sanctions regulations.
Additionally, in most sanctions programs, any transaction that causes a violation — including a transaction by a non-U.S. person that causes a U.S. person to violate sanctions — is also prohibited. For certain sanctions programs, U.S. persons, wherever located, also are prohibited from facilitating actions on behalf of non-U.S. persons if the activity would be prohibited by sanctions regulations if directly performed by a U.S. person or within the United States.
Implemented measures
Blocking of IP addresses coming from sanctioned jurisdictions
Based on the jurisdictions provided by the OFAC, we have implemented measures that prevent people from these jurisdictions of using our Bridge.
Blocking of addresses on SDN list
Based on the SDN list provided by the OFAC, we block EVM addresses that are registered on that list.
Reporting Potential Sanctions Violations
Botanix Labs is committed to full compliance with OFAC regulations and has established a robust process for identifying, investigating, and reporting potential sanctions violations. If a transaction is flagged for involving a sanctioned person, entity, or jurisdiction (e.g., via SDN list screening, geolocation tools, or transaction monitoring), our compliance team, led by the designated OFAC compliance officer, will promptly investigate. This includes analyzing transaction details (e.g., wallet addresses, IP data, KYC information) within 24 hours to confirm the violation. If confirmed, we will file a Blocked Property Report or Rejected Transaction Report with OFAC within 10 business days, as required, and implement remedial measures to address root causes. Suspected violations or inquiries can be reported to [email protected], ensuring swift action to maintain compliance and mitigate risks.
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