US government is unable block Bitcoin addresses. Still

The US government presented through The Office of Foreign Assets Control (OFAC) (the financial intelligence arm of the U. Treasury Department) releases sanctions against two Bitcoin addresses. The addresses in question have been carried over 7,000 transactions since 2013 and received almost 6,000 Bitcoins. The US authorities decided that once these addresses are being controlled by Iranian residents and may be used as a tool to circumvent US sanctions regime against Iran then it blacklists them.

US government is unable block Bitcoin addresses. Still

OFAC makes its point clear: “Like traditional identifiers, these digital currency addresses should assist those in the compliance and digital currency communities in identifying transactions and funds that must be blocked and investigating any connections to these addresses. As a result of today’s action, persons that engage in transactions with [these addresses] could be subject to secondary sanctions.” Since the 1st July this year one of the US Treasury officials, Marshall Billingslea, is also sitting as a rotating chief of FATF . The recent activities on these addresses show the futility of such sanctions since these two Bitcoin addresses stay functioning and can’t be frozen.

So the US authorities proves their inability to enforce sanctions regime? Still. The United States may go further and prohibit the general circulation of Bitcoin in its own country. Another way to handle this issue is to harness its influence o centralized cryptocurrencies exchanges. At the same time it’s worth to bear on mind that while cryptocurrency exchanges can and do block accounts linked to certain addresses, the Bitcoin protocol remains immune from such interference.

One of the leading crypto trading platform, Binance, has already indicated that “Binance Labs will consider investments in all non-sanctioned countries.” Recently Binance issued the change in its terms of use while stating that “If you have an account with Binance and fall into that [sanctions] category, please withdraw your assets from Binance as soon as possible.” At the same time if Binance and other exchanges are eager to obey OFAC rules then they may face clients’ outflow to decentralized platforms.

2018-12-02T00:01:53+00:00 1 December 2018|Tags: , , , |0 Comments

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