U.S. Federal Judge Finds Probable Cause for Conspiracy to Violate U.S. Sanctions and to Defraud the United States

In a recent opinion, U.S. Magistrate Judge Zia M. Faruqui of the U.S. District Court for the District of Columbia held that there is probable cause to find that a U.S. citizen-defendant violated U.S. sanctions by funneling cryptocurrency to a payments platform that the defendant operated in a “comprehensively sanctioned country.”

The opinion, which allows the Department of Justice’s (“DOJ”) criminal prosecution of the defendant to continue, adopts the U.S. Department of the Treasury, Office of Foreign Assets Control’s (“OFAC”) view that U.S. sanctions apply to cryptocurrency-related activities.  The opinion puts participants in the cryptocurrency industry – including U.S. financial institutions and U.S. and non-U.S.-based cryptocurrency exchanges – on notice of the range of civil and criminal penalties that can be levied against them for U.S. sanctions violations.

Continue reading on the Cleary Foreign Investment and International Trade Watch blog.