The United Kingdom’s Office of Financial Sanctions Implementation (OFSI) is escalating its fight against the use of digital currencies for sanctions evasion, creating a new partnership just as a United Nations report highlights the growing reliance of sanctioned states on stablecoins. According to a February 2, 2026 announcement reported by Mayer Brown, OFSI has partnered with the Crypto Cash Fusion Cell (CCFC), a multi-agency group including the National Crime Agency and the Financial Conduct Authority. The collaboration is designed to improve intelligence sharing and disrupt illicit activities, and has already resulted in action against potential sanctions breaches involving crypto assets in the UK.

 

This move comes amid mounting evidence that sanctioned nations are systematically using cryptocurrencies to bypass the global financial system. A recent UN report, supported by blockchain analysis from firms like Chainalysis, indicates that North Korea, Iran, and Russia are increasingly using stablecoins, particularly Tether, for illicit financial activities, according to Steptoe. These digital currencies, which are pegged to stable assets like the U.S. dollar, are reportedly being used to facilitate arms deals and transfer funds internationally. The stability of these assets makes them a preferred tool for illicit actors. The scale of this shift is significant, with Chainalysis data showing stablecoins accounted for 84% of illicit crypto transactions in the past year, a sharp increase from 63% the previous year.

 

 

OFSI has stated that any attempts to use cryptoassets to circumvent sanctions will be treated with the same severity as the exploitation of traditional financial systems. This intensified focus on the digital asset space signals a new front in the global effort to enforce economic sanctions. For businesses operating in the crypto sector, the partnership between OFSI and the CCFC means heightened scrutiny and compliance expectations. The collaboration aims to close the gaps that sanctioned entities have been exploiting, putting pressure on exchanges, wallet providers, and other virtual asset service providers to strengthen their anti-money laundering and sanctions screening processes. The UK’s proactive stance reflects a broader regulatory trend aimed at ensuring that the digital economy is not a safe haven for illicit finance.

 

 

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