OFAC

Govt agencies want more tools to trace suspect crypto transactions.

The U.S. Office of Foreign Assets Control has requested another subscription to Chainalysis analytics software in order to step up its blockchain transaction surveillance efforts.

In a public notice sent out on May 26, the agency confirmed its intention to subscribe to Chainalysis’s Rumker Training and Support Packages for what it deems as “mission-critical research”, further expanding its arsenal of surveillance tools.

This week’s public notice marks the second such request that the agency has made this month, having made a prior request for Chainalysis blockchain surveillance tools on May 4.

The latest notice stated the Department of Treasury’s Office of Foreign Assets Control requires a commercial online blockchain tracing web-based application tool to equip investigators in its Office of Global Targeting (OGT).

OFAC is a financial intelligence and enforcement agency of the U.S. Treasury Department that administers and enforces economic and trade sanctions in support of U.S. national security and foreign policy objectives.

The primary purpose of the software acquisition is for the U.S. government and foreign partners to collaborate in investigations into money laundering and terrorist financing.

The software would be used to analyze and track virtual currency transactions to harvest information on involved parties that OGT may put on the “Specially Designated Nationals And Blocked Persons List” (SDN) list.

The Chainalysis Rumker software suite includes Observations and Nodes, which help locate where server nodes are running. It also comes with Wasabi Demixing tools which allow the agency to access cryptographic information on previously obfuscated transactions. The notice stated:

“Chainalysis meets OFAC’s requirements by effectively providing the following capabilities: address clustering, transaction flow mapping and graphing, wallet explorer, analysis of user behavior, exchange rate, trade, and market data,”

A report by blockchain analysis firm Elliptic on May 27 has revealed that financial criminals have stepped up their efforts to circumvent state tracking by using mixing services, which let users mix their coins with others in a pool of funds to add a layer of anonymity to transactions.

Other methods include the use of privacy coins such as Monero and privacy wallets, in addition to using unregulated exchanges to avoid know-your-customer requirements.

In March, U.S. crypto exchange Coinbase reported that a number of its transactions were under review by the OFAC for potential violations of U.S. sanctions laws. There were no apparent violations at the time, it added.

In February, Cointelegraph reported that BitPay faced a half a million dollar fine from the OFAC for providing crypto services to sanctioned regions.