The United States Department of the Treasury’s list of Specially Designated Nationals has seen multiple cryptocurrency addresses added to it recently, many of which are marked as being possibly associated with the global drug trade. According to the Kingpin Act, US firms and citizens are not allowed any type of commercial relationship with crypto addresses that have been listed, as well as those individuals which are in any relation to them.
There have been three specific bitcoin addresses that have come under fire. They belong to a few citizens from China who haven’t been arrested or questioned in any way as far as this reporter is aware.
The global head of privacy for Chainanalysis has shared his worries in regards to account blocking and the possible reaction of the crypto market.
Speaking to CoinTelegraph last week, Chainanalysis’ Jesse Spiro said:
“While we cannot predict how an exchange will treat your account as a whole. Most likely, they would block the transaction itself, pending investigation into its (and your) connection to the designated individual/address.
Unless you had multiple transactions — in both directions — with the identified address, it would be surprising for an exchange to block your account as a whole. Everyone recognizes that someone could send Bitcoin to another without the recipient "agreeing" to deal with that person.
However, the exchange would likely look for active engagements between you and the designated individual. If the transaction was merely "in some way" sent and not due to you engaging it, then the blocking of the single transaction would presumably not be a major issue for you.”
CT ask Spiro if the United States Office of Foreign Assets Control (OFAC) blacklists a lot of bitcoin addresses and if so how the price will be impacted as such.
Spiro said in response:
“There are many factors at play for BTC price impact. Price could theoretically go up if more BTC is frozen and taken off the market.
But theoretically, more indicators of BTC involvement in serious illicit activity could further the image of BTC as the “money of dark net operators and criminals,” which could reduce broader adoption — and in turn, the price.
However, active financial integrity in the ecosystem could also help counter the concern that crypto is a Wild West, with no way of telling if you’re dealing with someone profiting off of child exploitation. In that sense, transparency and an ability to assess the activity at play can help build trust in cryptocurrency, which is a significant part of the Chainalysis mission.”
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