Navigating the crypto sanctions compliance minefield

A threat assessment from the Office of Financial Sanctions Implementation is a wake-up call concerning the geopolitical use of cryptoassets to bypass traditional financial systems and compliance mechanisms. It is "almost certain" that suspected sanctions breaches are underreported and "highly likely" that UK cryptoasset firms have been exposed to malignant Russian and North Korean entities, reports Fred Saugman.

Fred Saugman (frederick.saugman@wilmerhale.com) is counsel at WilmerHale, where he represents individuals and corporate clients in white collar criminal defence, criminal investigations and regulatory matters.

On 21 July 2025, the United Kingdom's Office of Financial Sanctions Implementation (OFSI) published a sector-specific Cryptoassets Threat Assessment ('the Report'), shedding light on the evolving risks and vulnerabilities in the crypto sector related to financial sanctions. As the crypto landscape continues to expand, this Report serves as a critical resource for UK cryptoasset firms and stakeholders aiming to strengthen compliance and mitigate exposure to illicit activity.