How OFAC sanctions work for crypto startups

The mechanics of OFAC sanctions and what they mean for a crypto startup's daily operations.

TL;DR

TL;DR: OFAC sanctions make transacting with listed parties illegal under strict liability. For startups, that means screening every payment against the SDN List.

The legal mechanics

OFAC, the US Treasury's Office of Foreign Assets Control, designates individuals and entities on the SDN List. US persons and companies cannot transact with them. Liability is strict: intent is not required, and civil penalties start at $356,000 per violation. The 50 Percent Rule extends the block to any entity owned 50 percent or more by a blocked person.

What it means day to day

For a crypto startup, the obligation lands on every payment. Sending USDC to a wallet, settling a payout, or accepting a counterparty all carry the same duty to check. Because blockchains settle irreversibly, a payment to a sanctioned wallet cannot be undone, so the check must happen before funds move.

How startups comply

Automation is the practical answer. sanctionsai.dev screens a counterparty in one HTTP call under 100 ms and returns ALLOW or BLOCK. A free tier of 5 checks per day requires no signup, letting a startup test the flow, and paid plans scale from $19 to $99 per month. Screening against live data synced hourly keeps the startup current without manual list work.