Crypto sanctions are legally binding prohibitions on transacting with OFAC-designated addresses, enforced automatically by exchanges via blockchain analytics; Plastron screens your wallet against the SDN list free, as an informational signal rather than legal advice.

Sanctions in crypto work through the same legal mechanism as traditional financial sanctions, but the enforcement technology is radically different. Traditional financial sanctions rely on correspondent banks to screen wire transfers against sanctions lists before clearing them. Crypto sanctions rely on blockchain analytics to trace fund flows from designated addresses across the entire transaction graph — potentially flagging wallets that have no direct connection to the sanctioned entity but received funds at multiple hops removed. The primary sanctions authority for crypto in the United States is OFAC — the Office of Foreign Assets Control within the Treasury Department. OFAC maintains the Specially Designated Nationals list, which since 2022 has included specific Ethereum and Bitcoin addresses linked to sanctioned entities including North Korean hacking groups (Lazarus Group, Kimsuky), Iranian cryptocurrency exchanges, Russian oligarchs, and Venezuelan government officials. OFAC added Tornado Cash to the SDN list in August 2022 — the first time a piece of open-source software was sanctioned rather than a person or organization. The EU, UK, UN, and other jurisdictions maintain their own parallel sanctions lists. Transactions involving SDN-listed addresses by US persons are prohibited regardless of intent — this is strict liability, not a knowledge-based standard. Exchanges therefore screen all deposits against the current OFAC list and refuse or freeze any deposit that connects to a designated address. The compliance challenge for users is that they often cannot tell whether their wallet has any sanctions-connected transactions — especially if the connection comes through DeFi pools, P2P trades, or inherited fund flows from previous wallet owners.