The UK's Office of Financial Sanctions Implementation has stated that cryptocurrency companies in the UK have likely been underreporting sanctions breaches since 2022. This assertion was made in a recent report, which coincides with the UK imposing additional sanctions on Russia. The report suggests that most instances of non-compliance among UK crypto firms are unintentional and occur due to exposure to sanctioned individuals or entities, either directly or indirectly. Since August 2022, crypto firms have been required to report suspected sanctions breaches to the Office of Financial Sanctions Implementation.
Notably, over 7% of all suspected breaches reported to the office since January 2022 have involved crypto-asset firms. Currently, 55 crypto firms are registered with the Financial Conduct Authority as part of the UK's anti-money laundering regulations. The report highlights the risk of crypto being used to evade restrictions, particularly after the invasion of Ukraine in February 2022, when multiple countries, including the UK, US, and European Union, imposed financial sanctions on Russia. Furthermore, the report warns that UK crypto firms are vulnerable to cyberattacks by North Korean hackers who often operate on behalf of sanctioned entities.