Does OFAC apply to Lightning Network?

Yes. Lightning payments are funds transfers subject to OFAC, and nodes routing them carry compliance obligations.

TL;DR

TL;DR: Yes. A Lightning payment is a transfer of value, so it is subject to OFAC. Nodes that route payments through sanctioned channels face compliance obligations.

Why Lightning is not exempt

Lightning moves bitcoin off chain, but the value still transfers between parties. OFAC reaches value transfers regardless of the rail. Strict liability applies, so a node operator does not need intent to facilitate a sanctioned payment. The channel being private does not remove the obligation.

What a routing node should do

• Check counterparty nodes and channels against the SDN List.
• Screen counterparty names against SDN names.
• Apply the 50 Percent Rule to majority owned entities.

Practical limits and controls

Lightning's privacy design makes full visibility hard, which raises the importance of screening what you can see. Check counterparties at channel open and before forwarding value where data is available. Log each screen. If a counterparty matches, refuse to route.

What is visible to a node

Lightning routing hides the full path, but a node still knows its direct counterparties and the channels it opens. Screen those counterparties and channels against the SDN List, and refuse to open a channel to a sanctioned party. The 50 Percent Rule applies to majority owned entities, so ownership checks matter even when the direct name is clean. Even partial screening is better than none, because it reduces the chance a node knowingly routes value for a sanctioned party.