OFSI Publishes Cryptoasset Sanctions Threat Assessment

The assessment is designed to assist UK firms in better understanding and protecting against threats to financial sanctions compliance.

Key judgements include:

➡️ OFSI is almost certain that UK firms have under-reported suspected financial sanction breaches since August 2022;

➡️ Most non-compliance by UK firms was inadvertent due to issues including direct and indirect designated person (DP) exposure and the delayed identification of breaches;

➡️ It is expected that UK firms are at risk of being targeted by DPRK-linked hackers attempting to obtain funds illicitly; and

➡️ It is likely that UK cryptoasset firms are currently facilitating transfers to Iranian cryptoasset firms with suspected links to DPs.

UK cryptoasset firms should review the OFSI threat assessment and ensure that their financial sanction risk management frameworks reflect the latest identified risk indicators. Firms are also reminded of their ongoing OFSI reporting obligations for any known or suspected financial sanction breaches.

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