US Expands Sanctions After Crypto Transfers From France

On Oct. 2 the U.S. Treasury’s Office of Foreign Assets Control added Association Baraka, Ensemble C Mieux and three individuals-Faouzi Barika, Amel Oualid and Saleem Abdallah Saleem al-Zaq-to its sanctions list after tracing hundreds of thousands of dollars in cryptocurrency transfers linked to a Hamas fundraising network.

Treasury alleges Barika and Oualid, both based in France, routed hundreds of thousands of dollars in digital assets to al-Zaq, whom the agency identified as a Gaza-based deputy battalion commander in Hamas’ military wing. The department said the two fundraisers and their associated organizations collected more than $2 million for Hamas between 2020 and 2026, and noted that only part of that amount involved digital assets.

Under current U.S. sanctions law, exchanges, custodians and payment processors subject to U.S. jurisdiction must block property in which the newly designated parties have an interest when those assets come within U.S. possession or control. OFAC treats digital assets as property. A U.S.-regulated crypto firm that identifies assets linked to a blocked person must deny access and report the holdings to OFAC within 10 business days, and include blocked assets in annual reports.

The agency does not require custodians to convert frozen cryptocurrency into dollars. Custodians may keep the assets in their current form while preventing the designated parties from accessing or transferring them.

The blocking requirement applies to entities that are 50% or more owned, directly or indirectly, by one or more designated persons, which can expand the set of entities that compliance teams must screen beyond the five names named by OFAC.

Treasury warned that foreign financial institutions could face secondary sanctions for knowingly facilitating significant transactions for designated parties, creating potential compliance exposure for offshore exchanges and other intermediaries that served the alleged network.

Enforcement will depend on jurisdictional factors, ownership, whether blocked property is involved and, in some cases, the size of a transaction and the knowledge of the parties involved. The department said the action does not amount to a global freeze on every blockchain transaction connected to the listed parties.

Treasury indicated it may publish additional wallet addresses, intermediaries or related entities in the future. Any such disclosures would expand the screening obligations for exchanges and could prompt them to reassess historical transaction exposure.

The designations are part of an ongoing U.S. effort to disrupt financing for Hamas by tracing both digital-asset transfers and traditional banking or cash channels. Firms subject to U.S. jurisdiction must implement screening to detect the new names, block identified assets, file required reports with OFAC and evaluate ownership structures that could bring other entities into scope.