GUIDE

OFAC Sanctions Screening for Foreign-Owned Crypto & Forex Businesses

A US entity doesn't get a pass on sanctions compliance just because the owner and most customers are elsewhere.

A US-formed crypto or forex business is subject to OFAC (Office of Foreign Assets Control) sanctions rules regardless of where the founder or most customers are based. This surprises a lot of foreign founders who assume US sanctions law is only about US persons - it isn't. If your entity is US-formed, sanctions screening applies to who you do business with, wherever they are.

What sanctions screening actually checks

At minimum: the OFAC Specially Designated Nationals (SDN) list, and depending on your business, relevant UN and EU sanctions lists as well. Screening isn't a one-time check at onboarding - it needs to run on an ongoing basis, since lists change and a customer who was clean at signup can be added later.

Why this matters more for crypto and forex specifically

Both verticals move value quickly and, in crypto's case, sometimes pseudonymously - which makes them a specific enforcement focus. A bank or payment processor evaluating your business will ask about sanctions screening as a matter of course, not as an edge-case question. Not having an answer is one of the faster ways to get an application declined.

What this looks like in practice

Screening built into onboarding, not bolted on after
Ongoing/periodic re-screening of existing customers against updated lists
A documented process for what happens on a match - not just a technical block, a defined escalation
Recordkeeping that shows the screening actually happened, not just that a policy exists on paper

How this connects to your other compliance work

Sanctions screening is one piece of a broader AML/KYC framework - it shouldn't be built as a separate, disconnected process. If MSB status applies to your business, screening expectations tie directly into that registration too.

FAQ

Does this apply if I have no US customers at all? Often yes - a US-formed entity's obligations aren't limited to US-based counterparties. Confirm your specific exposure rather than assuming either way.

Can I use a free/manual screening process? For a very early-stage business with few customers, manual checking against public lists is technically possible, but it doesn't scale and most banks/partners expect an automated, auditable process once you're operating at any real volume.

Next step

If you're not sure whether your sanctions screening setup would hold up to a bank or partner's review, that's worth confirming before it becomes a blocker in an application you're waiting on.

Want this handled for your business instead of doing it yourself?

See AML/KYC Framework Service Find My Business Gaps