OFSI has published a report setting out its threat assessment relating to sanctions compliance in the cryptoassets sector.
Key takeaways included that it is:
- almost certain that cryptoasset firms have under-reported suspected breaches of financial sanctions to OFSI since August 2022;
- likely that most non-compliance by UK cryptoasset firms has occurred inadvertently due to common issues such as direct and indirect exposures to designated persons and suspected breaches being identified after a delay in attribution;
- highly likely that UK cryptoasset firms have been directly or indirectly exposed to the designated Russian exchange Garantex since its designation in 2023, resulting in breaches of UK financial sanctions;
- highly likely that UK-based cryptoasset firms are currently at risk of being targeted by DPRK-linked hackers and IT workers seeking to steal or obtain funds through illicit means; and
- likely that UK cryptoasset firms are currently facilitating transfers to Iranian cryptoasset firms with suspected links to designated persons.