Does OFAC apply to stablecoin yield products?

Yes. Stablecoin yield products move value at deposit, distribution, and withdrawal, so OFAC screening applies at every step.

TL;DR

TL;DR: Yes. A yield product takes deposits, pays distributions, and processes withdrawals, all of which are transfers of value subject to OFAC. Screen each step.

Where value moves

A yield product touches value at three points:

• Deposit: the user funds the product.
• Distribution: the product pays yield to the user's wallet.
• Withdrawal: the user pulls principal or earnings out.

Each is a transaction OFAC can reach. Strict liability means the operator does not need intent to violate, so a yield payment landing in a designated wallet is exposure even if it was automatic.

What to screen

Check the wallet address on the SDN List before each deposit, distribution, and withdrawal. Apply the 50 Percent Rule to entities majority owned by a blocked person. A live list of listed crypto wallets and SDN names, synced hourly, keeps the check current and catches new designations promptly.

Practical controls

Run a screening call under 100 ms in the deposit and withdrawal path so users see no meaningful delay. Log every screen. If a wallet is flagged, block the transaction rather than paying out, and review the account before it receives any further distribution.

Distribution is a payment, not just accounting

Teams sometimes treat yield as bookkeeping and forget that it moves value. Every distribution is a transfer to a specific wallet, so it needs the same screen as a deposit or withdrawal. A flagged lender should be blocked before the yield is sent, and the account reviewed before any further payout, because each distribution is a fresh transaction.