Coinbase Has Resolved OFAC Bug With Only 100 Users Affected 

Key Points:

• Several Reddit users stated that bitcoin transactions from Binance to Coinbase were being stopped owing to potential sanctions issues.
• A Coinbase spokeswoman confirmed that there was a technical problem that affected less than 100 customers and has already been resolved. Coinbase sent impacted consumers an email indicating the money will be reimbursed to their account shortly.

Coinbase, one of the world’s major digital currency exchanges, stated on March 8, 2023, that it had uncovered a problem in its system that affected a limited number of customers.

Coinbase said that a flaw in its system had been detected, affecting a limited number of customers. The flaw has something to do with the Office of Foreign Assets Control (OFAC), which is in charge of imposing economic penalties on countries and individuals. The problem emerged when Coinbase’s OFAC compliance system wrongly alerted some users. This resulted in their accounts being frozen, which created understandable annoyance and difficulty for those impacted. Coinbase, on the other hand, worked rapidly to rectify the issue and indicated that less than 100 individuals were affected.

Coinbase has also informed its consumers that it has made considerable steps to avoid similar problems in the future. To guarantee that all users are adequately verified and flagged as appropriate, the organization has enhanced its compliance system, increased the number of people committed to compliance, and established new processes.

The firm has always emphasized its users’ safety and security, and this event is no exception. Coinbase has proved its commitment to protecting its users and complying with OFAC requirements by acting quickly and implementing major modifications to its compliance infrastructure. As usual, consumers can be confident that their investments are in excellent hands with Coinbase.

Late Tuesday, users on Reddit and Twitter reported that efforts to move bitcoin from Binance to Coinbase were met with an Office of Foreign Assets Control (OFAC) notification stating that their transfer was being rejected because it originated from a “OFAC sanctioned address.” OFAC maintains a long list of cryptocurrency wallets and protocols that have been labeled as “particularly designated nationals” and sanctioned, which means that US-based businesses are not permitted to communicate with them. This issue might have been caused by a data entering mistake. Tornado Cash, a cryptocurrency mixer, was put on the sanction list in August 2022. Tornado Cash has been used several times to hide the destinations of stolen cryptocurrency, notably by North Korea.

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