How to understand OFAC sanctions
Understanding OFAC sanctions means reading the SDN List, knowing the 50 Percent Rule, and grasping strict liability.
TL;DR
TL;DR: To understand OFAC sanctions, learn to read the SDN List, understand identifiers like wallet addresses, and internalize three concepts: strict liability, the 50 Percent Rule, and penalties that start at $356,000.
Read the SDN List
The Specially Designated Nationals (SDN) List is the core document. It contains 19,218 names published as the US Treasury sdn.csv file, and it changes over time as OFAC adds and removes entries. In crypto, the same framework extends to OFAC-listed wallet addresses, of which 947 are tracked in the live screening data.
Three concepts to internalize
- Strict liability: intent is not required, so a transaction with a blocked party is a violation even by accident.
- The 50 Percent Rule: an entity owned 50 percent or more by a blocked person is itself blocked.
- Penalties: civil penalties start at $356,000 per violation.
Turn understanding into a control
Understanding the rules matters only if it changes behavior. The practical step is to screen every counterparty before value moves, using a tool that checks names, wallets, and jurisdictions against a current list and returns ALLOW or BLOCK. That converts a conceptual understanding into a mechanical safeguard.