On July 21, 2025, the UK Office of Financial Sanctions Implementation (OFSI) published its Cryptoassets Threat Assessment Report. The report outlines key sanctionsevasion threats, highlights red flags that businesses should monitor, and offers guidance on strengthening compliance controls in the cryptoasset space.
Below is a categorized list of red flags identified in the report:
Transaction Behavior Red Flags
- Large or unusual transactions immediately following sanctions announcements
- Sudden or unexplained changes in transaction patterns
- Rapid movement of assets through multiple addresses (hop chains)
- Newly created or previously dormant wallets suddenly receiving large transfers
- High cumulative volume from multiple small transactions (typically under £10,000)
- Use of cross-chain bridges or chain-hopping to obscure fund origin
- Concentrated inflows from mixers, darknet sources, or ransomware-linked wallets
- Frequent use of privacy-enhancing coins or wallets
Customer / Entity Behavior Red Flags
- Exposure to counterparties connected to designated persons (DPs)
- Counterparties refusing to undergo KYC or compliance checks
- Use of VPNs or anonymizing tools to disguise location
- Multiple wallets controlled by a single entity or account
- Single accounts generating hundreds or thousands of deposit addresses via API
Platform & Service Usage Red Flags
- Use of unregulated or non-KYC-compliant crypto exchanges
- Reliance on OTC brokers or peer-to-peer (P2P) platforms to bypass regulation
- Engagement with darknet marketplaces or anonymity-enhancing services
- Use of low-profile or newly launched DeFi platforms to obfuscate activity
Marketing & Operational Red Flags
- Promotion of “no-passport,” “anonymous,” or “sanctions-proof” services
- Transactions linked to sanctioned jurisdictions or high-risk regions
- Frequent or unexplained migration of technical infrastructure (e.g., server locations)
- Inconsistent or vague explanations regarding the source of funds
Read more at FCC Times https://www.fcctimes.com/2025/07/21/uk-sanctions-authority-publishes-sector-specific-assessment-amid-evolving-threat-landscape/?utm_source=RZOLUTWebsite&utm_medium=FCCRegUpdate01Aug25
