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Sanctions play a critical role in regulating the crypto industry, targeting illicit actors, money launderers, and rogue states that exploit digital assets. These measures often blacklist wallet addresses, exchanges, and individuals tied to financial crimes, forcing crypto businesses to enhance compliance.
In this article, we examine the most notable crypto sanctions of 2024, referencing major events in 2025 for additional perspective. As enforcement evolves, crypto businesses must stay ahead to mitigate risks and ensure regulatory compliance.
Sanctions in the cryptocurrency space typically target specific wallet addresses, entities, or even entire countries. For instance, the U.S. Office of Foreign Assets Control (OFAC) maintains a list of sanctioned cryptocurrency addresses that exchanges and other crypto businesses are prohibited from transacting with. These addresses should be incorporated into an organization's blacklist to ensure compliance.
Beyond individual addresses, regulators can impose sanctions on entire entities or jurisdictions. For example, authorities may blacklist addresses linked to a sanctioned nation or a criminal organization such as the Lazarus Group. However, enforcing these broader sanctions is more complex. Crypto businesses cannot simply rely on static address lists, as illicit actors frequently change wallets to evade detection. Instead, they must employ advanced blockchain analytics, such as geolocation tracking to identify transactions originating from restricted regions or risk categorization techniques to flag addresses associated with illicit networks.
By leveraging sophisticated monitoring tools, crypto businesses can enhance compliance and mitigate exposure to sanctioned entities while adhering to global regulations.
2024 was notable because it was the last full year of President Biden’s administration in the United States, which prosecuted exchanges and crypto businesses for selling unregistered securities under the Howey Rule. In 2024, there were 13 enforcement actions by the Securities and Exchange Commission alone.
Below are the most notable sanctions cases in a year that was rife with them.
In September 2024, the United States sanctioned Sergey Sergeevich Ivanov for providing money laundering services to ransomware groups, hackers, and other criminal entities targeting the country. The State Department placed a $10 million bounty on information leading to his arrest.
At the same time, the U.S. sanctioned Russian exchanges Cryptex and PM2BTC, which had employed novel obfuscation techniques to facilitate illicit transactions. This move underscored the persistent role of bad actors in rogue markets like Russia while demonstrating how sanctions can still disrupt their operations—OFAC, for instance, explicitly listed Cryptex’s associated wallet addresses.
These sanctions take on greater significance following President Trump’s February 2025 Oval Office clash with Ukrainian President Zelenskyy over the war with Russia, hinting at a potential shift in U.S. policy. Given Trump’s conciliatory stance toward Moscow, his administration may scale back sanctions on Russian entities, particularly those linked to financial crime rather than direct military actions. This could create regulatory uncertainty, undermining enforcement efforts against illicit crypto transactions and granting sanctioned Russian actors greater operational freedom.
Tornado Cash is one of the most well-known cryptocurrency mixers, frequently used by criminal organizations, including the Lazarus Group, to launder illicit funds. In August 2022, the U.S. Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, prohibiting individuals and businesses from using the mixer or risk severe penalties.
What makes Tornado Cash unique is that it is not a traditional entity or individual but rather a decentralized smart contract. This distinction led several individuals, backed by funding from Coinbase, to sue the U.S. Treasury Department, arguing that sanctioning a smart contract exceeded the regulator’s legal authority. In November 2024, a U.S. federal appeals court ruled in their favor, overturning the sanctions against Tornado Cash.
This reversal of sanctions may be the most significant sanctions-related case of 2024, as it sets a precedent with far-reaching implications. It raises concerns that criminals and illicit groups could exploit smart contracts as a legal shield to evade enforcement. As a result, businesses and regulators will need to develop new strategies to address illicit activities conducted through decentralized technologies.
Lu Huaying and Zhang Jian, both affiliated with North Korea, were sanctioned by OFAC in December 2024 for operating a front company in the United Arab Emirates to launder funds tied to state-sponsored crypto crime.
These sanctions are particularly significant in the aftermath of the Bybit hack, in which the Lazarus Group stole a record-breaking $1.4 billion. Faced with heightened scrutiny from the crypto community, the group was forced to adopt new laundering techniques, including the use of meme coins to obscure fund flows.
By targeting these North Korean operatives and their associated entities, the sanctions disrupt key money laundering channels, making it more difficult for the regime to launder illicit funds. Over time, this pressure could tighten regulatory oversight, restrict North Korea’s ability to move crypto assets, and erode its overall liquidity—ultimately weakening its ability to fund illicit activities.
In December 2024, nine individuals affiliated with the TGR Group were sanctioned by OFAC. Like previous sanctions against Sergey Sergeevich Ivanov, Cryptex, and PM2BTC, the TGR Group has ties to Russia. However, unlike those entities, which primarily used Russia as a safe haven, the TGR Group was directly involved in laundering funds for the Russian elite as part of a broader crypto-based sanctions evasion scheme.
The TGR Group was brash: They even leveraged a Wyoming-based entity as part of its laundering network, highlighting how US corporate structures can be exploited for illicit financial activities. Additionally, the syndicate used USD-backed stablecoins alongside traditional crypto tokens, demonstrating that stablecoins are not just a tool for payments and remittances but also a potential vehicle for money laundering.
This revelation has immediate policy implications. Crypto and AI Czar David Sacks has already identified stablecoin legislation as a top priority for the new Trump administration. With clear evidence that stablecoins can be misused for laundering, legislative efforts will need to expand beyond consumer protection—such as ensuring one-to-one reserves—and also focus on mitigating their role in illicit financial flows.
While these are the most notable crypto sanctions cases of 2024, regulators worldwide continue to impose new restrictions, adding sanctioned entities and wallet addresses at an increasing pace. For crypto exchanges and businesses, manually blacklisting addresses or assessing exposure is neither practical nor effective.
Instead, they must leverage advanced blockchain analytics solutions like Merkle Science’s Compass, which automates risk categorization and adapts to evolving threats. Compass allows businesses to configure risk assessments on a per-jurisdiction basis, ensuring compliance with local regulations while proactively identifying illicit activity.
Get in touch with Merkle Science on how Compass can enhance your compliance with sanctions.
