The Office of Foreign Assets Control (OFAC) at the U.S Treasury revealed in a press release today that it has blacklisted thirteen cryptocurrency addresses belonging to three Chinese nationals who allegedly violated drug trafficking and money laundering laws.
As per an updated “Designated Nationals and Blocked Persons List” published by the regulatory watchdog, the three men Xiaobing Yan, Fujing Zheng, and Guanghua Zheng are alleged narcotics traffickers as specified by the U.S Foreign Narcotics Kingpin Designation Act.
OFAC likely believes that the alleged men laundered the proceeds from their crime using the blacklisted Bitcoin and Litecoin wallet addresses, and will as part of their enforcement actions also seize assets that the persons owned in the U.S.
Aside from the three men, the release also revealed OFAC sanctions against two entities, namely; Qinsheng Pharmaceutical Technology Co., and the Zheng Drug Trafficking Organization. These entities piloted narcotics trafficking, although the regulator did not say they used cryptocurrencies to launder proceeds.
Meanwhile, it is essential to note that if the persons and businesses accused by the OFAC are found guilty, then they, according to the law could pay a fine of $1.1 million for their violation. There is also the possibility of criminal penalties reaching the $5 million range, with up to 30 years imprisonment likely.
Interestingly, this is only the second time that OFAC is directly mentioning crypto wallet addresses as part of its sanction against a foreigner.
In November 2018, we reported that the regulator sanction Bitcoin wallet addresses belonging to two Iranians, Ali Khorashadizadeh and Mohammad Ghorbaniyan. The men allegedly collaborated with a crypto-targeted ransomware attack and helped launder proceeds from the illegal activity.