U.S. Treasury Sanctions of Bitcoin Addresses are 'Good for Crypto'

The U.S. Department of the Treasury’s Office of Foreign Assets (OFAC) has banned U.S. citizens from interacting with two Bitcoin addresses. In a press release published this afternoon, the U.S. OFAC identifies two Iranian men tied to ransomware scams.

For the first time in OFAC history, the department publicly announced the Bitcoin addresses and stated that “U.S. persons generally are prohibited from dealing with them.”

The two persons in question, Ali Khorashadizadeh and Mohammad Ghorbaniyan, were responsible for exchanging ransom payments paid in Bitcoin, into Iranian Rial. The laundered currency comes from malicious cyber attackers who used the SamSam ransomware to forcibly obtain funds from over 200 victims.

Today’s announcement states the OFAC has identified two Bitcoin addresses known to be used by these two cyber-criminals. These addresses have been used to wash millions of U.S. dollars over more than 7,000 transactions since 2013.

SamSam Ransomware

The “SamSam” scam is a basic ransomware attack, whereby the hackers infect the victim’s computer, then attempt to gain administrator rights to the system. Once administrator privileges are secured, the hackers can scrape all of the victim’s data and files, then lock out the rightful owners. Then, the scammers demand ransom payment in Bitcoin in order for the victims to regain control of their computers.

The two addresses in question are 149w62rY42aZBox8fGcmqNsXUzSStKeq8C and 1AjZPMsnmpdK2Rv9KQNfMurTXinscVro9V. Looking at the blockchain data, these two addresses have received a total of 5,901 BTC, or $25,374,300. However, both of these accounts have been drained and currently hold zero Bitcoin.

The announcment stated:

Treasury is targeting digital currency exchangers who have enabled Iranian cyber actors to profit from extorting digital ransom payments from their victims. As Iran becomes increasingly isolated and desperate for access to U.S. dollars, it is vital that virtual currency exchanges, peer-to-peer exchangers, and other providers of digital currency services harden their networks against these illicit schemes...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.

Sigal Mandelker, Treasury Under Secretary for Terrorism and Financial Intelligence

'Good News for Crypto'

Marco Santori, Chief Legal Officer of Blockchain took to twitter to give his thoughts on the landmark announcement. He belives that OFAC has the tools required to enforce these sanctions as they did not ask for more legislation to aid their efforts. He went on to say that the "Treasury is fighting crypto bad guys using the tools already at its disposal." Concluding that this was "good news for crypto."


Bank of England Governor Recommends Replacing Dollar With 'Libra-Like' Digital Currency

  • BOE Governor Mark Carney proposed replacing the US dollar with a libra-like digital currency as the global reserve. 
  • Called for a dramatic shift in policy to address the changing economic landscape. 

Bank of England Governor Mark Carney has made a radical recommendation for central banks that the U.S. dollar be replaced with a Libra-like digital reserve currency. 

Replacing the Dollar

Speaking at the Federal Reserve’s annual Jackson Hole Symposium on Aug. 23, Carney called for a dramatic shift in global monetary policy that would see central banks taking a greater interest in digital currencies such as Facebook’s forthcoming libra. 

The BOE Governor’s proposal would replace the U.S. dollar as the world’s reserve currency with a digital alternative. While it was unclear if Carney was actually suggesting that libra could be used to fill the void, his intent was to spur interest in a fiat alternative for global reserves. 

Carney argued that proactively replacing the dollar with a digital coin substitute would be preferable to allowing another national currency usurp its status--such as the Chinese renminbi. 

He pointed to the global economic uncertainty in part being generated by deteriorating U.S. trade relations, 

The combination of heightened economic policy uncertainty, outright protectionism and concerns that further, negative shocks could not be adequately offset because of limited policy space is exacerbating the disinflationary bias in the global economy.

He continued, 

When change comes, it shouldn’t be to swap one currency hegemon for another. Any unipolar system is unsuited to a multi-polar world. We would do well to think through every opportunity, including those presented by new technologies, to create a more balanced and effective system.

Cryptocurrencies Gaining Prominence

The introduction of a non-fiat currency could have the effect of devaluing the dollar, and most national currencies, which could be one way for central banks to introduce inflation to erode away the record levels of debt accumulating globally. 

Some have speculated that an alternative asset such as gold could be used as an intermediate. However Carney, who announced several months ago he would be stepping down as Governor of the BOE, has shown a route to fiat alternatives which includes the creation of digital currencies.

He lauded the technology for its efficiency in payments and cross-border transactions, 

The most high profile of these has been Libra – a new payments infrastructure based on an international stablecoin fully backed by reserve assets in a basket of currencies including the US dollar, the euro, and sterling. It could be exchanged between users on messaging platforms and with participating retailers.

While Carney’s suggestion to replace the U.S. dollar is one of the most radical proposals yet, it does give insight into the global trend in central banks to pursue digital currencies as an alternative to their outdated fiat counterparts.