01-30-2026 
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The United Kingdom Office of Financial Sanctions Implementation (OFSI), the country’s sanctions enforcement authority, published a blog post outlining its efforts to tackle the abuse of digital assets and the associated money laundering.
“Sanctions enablers are increasingly turning to cryptoassets to move and hide illicit funds, including those linked to sanctions evasion,” the OFSI said. “But every transaction leaves a trace. By working together, UK agencies are following those traces to identify, investigate and disrupt criminal activity.”
According to the blog, the OFSI recently joined forces with the Crypto Cash Fusion Cell (CCFC)—a multiagency pilot initiative—to target criminal funds linked to sanctions offences and improve how the U.K. enforcement and regulatory community identifies, understands, and responds to criminal abuse of digital currencies.
The CCFC brings together the National Crime Agency (NCA), the Metropolitan Police Service, His Majesty’s Revenue and Customs, the Financial Conduct Authority (FCA), City of London Police, and the OFSI.
For its part, the OFSI said it shared “detailed intelligence” with the CCFC to enable joint working against specific, prioritized targets, which led to action against potential breaches of financial sanctions involving digital currencies by U.K.-based individuals—who it did not name.
“The collaboration, which involves law enforcement, regulators and private sector partners such as blockchain analytics provider Elliptic, is enhancing our understanding of the threat and supporting joint learning across partners,” OFSI said. “During a short, focused, analytical operation, UK law enforcement, government agencies and the private sector worked side-by-side sharing intelligence in real time and rapidly turning data into operational outcomes.”
Elliptic, the private sector partner mentioned by the sanctions authority, said in its own post on the operation that it provided “investigators the power to trace transactions, screen wallets and identify exposure to illicit activity.”
The firm added that its ‘Elliptic Data Fabric’ blockchain intelligence infrastructure brought the company’s full dataset into agency systems, including sanctioned entity intelligence, wallet attributions, transaction histories, risk scores, and cross-chain tracing across thousands of digital currencies.
“Tracing funds from A to B is no longer enough. To be effective, investigators need to move faster, prioritize leads intelligently and work across agency boundaries,” Elliptic said. “That requires shared access to the underlying data and intelligence that support blockchain analytics solutions.”
Scale of the problem
In August 2022, digital asset firms were added to the list of ‘relevant firms’ in U.K. sanctions regulations. Meaning, they were henceforth obliged to report certain information to the OFSI when they knew, or had reasonable cause to suspect, they had encountered a designated person (sanctioned entity) or a breach of financial sanctions regulations.
Last July, the OFSI published a full digital currency threat assessment report noting that, since January 2022, just over 7% of all suspected breach reports submitted to OFSI involved cryptoasset firms.The report came to five key conclusions about sanctions evasion via the U.K. digital asset sector:
- First, it is “almost certain” that U.K. cryptoasset firms under-reported suspected breaches of financial sanctions to the OFSI since August 2022.
- Second, it is likely that most non-compliance occurred “inadvertently” due to common issues, such as suspected breaches being identified after delays in attribution.
- Third, it is highly likely that firms have been directly or indirectly exposed to the sanctioned Russian exchange Garantex, since its designation in 2023, resulting in breaches of U.K. sanctions.
- Fourth, it is highly likely that U.K.-based digital currency firms were “currently at risk of being targeted by DPRK-linked hackers and IT workers seeking to steal or obtain funds through illicit means.”
- And fifth, it is likely that U.K. digital currency firms are currently facilitating transfers to Iranian entities with links to sanctioned persons.
On this latter point, the U.K. was recently the subject of unwanted headlines when The Washington Post reported in January that the Islamic Revolutionary Guard Corps (IRGC), Iran’s security forces, had utilized two digital asset exchanges registered in the U.K. to transfer approximately $1 billion since 2023, thereby evading international sanctions.
With the current tensions between Iran and the United States threatening to boil over into all-out war, the long-sanctioned country is increasingly prominent in the minds of geopolitical observers and interested parties around the globe. This may have contributed to the OFSI’s latest clampdown on digital asset sanctions evasion.
In its January 28 announcement, the U.K.’s sanctions watchdog said that “the use of cryptoassets to evade sanctions is treated no differently to the exploitation of traditional currencies.”
It added that “the OFSI stands ready to investigate and pursue sanctions offences involving cryptoassets, alongside partners from across government, law enforcement and industry, as our intelligence continues to be developed.”
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