U.S. Treasury Sanctions Bitcoin Wallets For First Time

Authored by Michael Kern via Safehaven.com,

Last week, the U.S. Treasury Department of Foreign Assets Control (OFAC) targeted two bitcoin addresses, announcing that the wallets associated Iranian citizens Ali Khorashadizadeh and Mohammad Ghorbaniyan had been added to the Specially Designated Nationals sanctions list.

The sanctions, which are the first of their kind, are part of a wider move to track and restrict movements in the digital space involving money laundering and cybercrime. 

Additionally, the OFAC noted that the agency would be looking into exchanges who facilitated transactions by these individuals, stating:


“We are publishing digital currency addresses to identify illicit actors operating in the digital currency space. Treasury will aggressively pursue Iran and other rogue regimes attempting to exploit digital currencies and weaknesses in cyber and AML/CFT safeguards to further their nefarious objectives.”


The cause for the sanctions, according to the OFAC, was that Khorashadizadeh and Ghorbaniyan were involved in malicious SamSam ransomware attacks.

In addition to the sanctions placed on Khorashadizadeh and Ghorbaniyan, it is noted that two others, Faramarz Shahi Savandi, and Mohammad Mehdi Shah Mansouri had been officially charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit fraud related to computers, and other counts accusing them of intentionally damaging protected computers and illegally transmitting demands related to protected computers.

The SamSam ransomeware has impacted over 200 victims to date, including hospitals, corporations, universities and government facilities.

In an interview with CoinDesk Ghorbaniyan explained,


“I didn’t know the SamSam criminal activities were associated with the bitcoins I received from these two customers and I’m honestly still not sure if these two people are behind the SamSam crimes.”

Adding, “I do a standard know-your-customer (KYC) procedure. And there’s no reason to be suspicious of my customers once they do KYC.”


Sanctions Set a New Precedent

Though Khorashadizadeh and Ghorbaniyan were targeted for potential involvement in criminal activities, the U.S. Treasury Department’s move sets a new precedent in the crypto-sphere.

With Iran currently reeling from wider economic sanctions from the U.S., and bitcoin usage on the rise in the Middle-Eastern country, it is possible that these actions could be the first of many. And the consequences for exchanges caught in the crossfire could be severe.


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