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US Judge Launches First Criminal Cryptocurrency Sanctions Case

 |  May 16, 2022

The Justice Department has launched its first criminal prosecution involving the alleged use of cryptocurrency to evade US economic sanctions, reported The Washington Post.

The nine-page complaint headed by US Magistrate Judge Zia Faruqui posits that the millions in Bitcoin were used illegally by transmission to sanctioned countries, such as Syria, Russia, North Korea, Iran, and Cuba. 

In the ruling, Faruqui disclosed various concerns surrounding digital currencies, weighing in on concepts like the prevailing theory surrounding its anonymity in use, as well as their ultimate standing in regards to legal action. He cites a newly-inducted action filed under the Treasury Department’s Office of Foreign Assets Control, allowing judges to make their own observations and complaints regarding virtual currencies and US sanctions. 

“Issue One: virtual currency is untraceable? WRONG … Issue Two: sanctions do not apply to virtual currency? WRONG,” Faruqui wrote, adopting and crediting the staccato-delivery style of the late American political commentator John McLaughlin and his long-running television program, “The McLaughlin Group.”

“The Department of Justice can and will criminally prosecute individuals and entities for failure to comply with OFAC’s regulations, including as to virtual currency,” Faruqui said.

Faraqui sees the case as a simple slam dunk given probable cause in the defendant’s transmission of cryptocurrency and aid to sanctioned countries outside US reach. No matter the ruling, the defendant already is facing a mountain of legal trouble from liability concerns in utilizing two crypto exchanges for said nefarious transactions.

Read the opinion here