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The US has blacklisted digital currency addresses for three Chinese nationals

August 22, 2019
The US Department of Treasury building
The US Department of Treasury buildingAssociated Press

The Treasury Department has blacklisted several digital currency addresses it says belong to three Chinese nationals accused of trafficking synthetic opioids in the US. 

The news: The US Treasury’s Office of Foreign Assets Control (OFAC) alleges that Xiaobing Yan, Fujing Zheng, and Guanghua Zheng have been running an international drug trafficking operation in the US. In turn, it has frozen these individuals’ US-based assets. OFAC has also blacklisted a number of digital currency addresses associated with them, claiming that the accused drug traffickers laundered their proceeds “in part by using digital currencies such as Bitcoin.”

Not the first time: These aren’t the first digital currency addresses that OFAC has blacklisted. In November 2018, the office added Bitcoin addresses linked to two Iranian nationals to the Specially Designated Nationals list, prohibiting US citizens from dealing with them. 

The two men allegedly helped exchange millions of dollars’ worth of Bitcoin acquired via a ransomware scheme. At the time, the Wall Street Journal called the news “a signal of a new era in which illicit gains are transacted in code instead of cash.” The latest action reinforces how serious US officials are about cracking down on the use of cryptocurrency for money laundering (See “New money-laundering rules change everything for cryptocurrency exchanges). 

We still have questions, though. What happens if blacklisted users simply get new addresses, which is a relatively easy thing to do? And what will the consequences be if US entities transact with the blacklisted addresses? Perhaps publicizing digital currency addresses is more about sending a message to prospective money launderers: You are being watched.

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