Because of a technical issue on Coinbase’s end, certain bitcoin transfers from Binance were prevented. Late on Tuesday, users on Reddit and Twitter began reporting that when they tried to transfer bitcoin from Binance to Coinbase, they were met with a notice from the Office of Foreign Assets Control (OFAC) that said their transfer was being blocked because it originated from a “OFAC sanctioned address.” This notice was reportedly displayed when they attempted to transfer bitcoin.
A spokeswoman for Coinbase confirmed that this was a technical issue, which only a small number of customers (less than 100) were affected by, and which has since been resolved. Coinbase has informed consumers whose deposits were affected by this issue through email that the funds would be reimbursed to their accounts in the near future.
The Office of Foreign Assets Control (OFAC) has a long list of cryptocurrency wallets and protocols that have been labeled as “particularly designated nationals” and sanctioned. This means that organizations headquartered in the United States are not permitted to contact with the entities on the list.
This issue might have been brought on by a mistake made during the entering of the data. The cryptocurrency mixer Tornado Cash was included on the list of prohibited services in August of 2022. Tornado Cash has been utilized on many occasions in an attempt to conceal the final destinations of stolen cryptocurrency, notably by the North Korean government.
Coinbase is presently lending its support to a legal challenge that seeks to persuade the United States Treasury to reconsider its judgment about Tornado Cash.
