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559. For purposes of OFAC sanctions programs, what do the terms "digital currency," "digital currency wallet," "digital currency address," and "virtual currency" mean?
Digital currency includes sovereign cryptocurrency, virtual currency (non-fiat), and a digital representation of fiat currency.
A digital currency wallet is a software application (or other mechanism) that provides a means for holding, storing, and transferring digital currency. A wallet holds the user's digital currency addresses, which allow the user to receive digital currency, and private keys, which allow the user to transfer digital currency. The wallet also maintains the user’s digital currency balance. A wallet provider is a person (individual or entity) that provides the software to create and manage wallets, which users can download. A hosted wallet provider is a business that creates and stores a digital currency wallet on behalf of a customer. Most hosted wallets also offer exchange and payments...
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1) This FAQ was initially issued in 2018, and was amended on October 15, 2021, concurrent with the release of Sanctions Compliance Guidance for the Virtual Currency Industry (2021 Brochure).
The original FAQ defined "virtual currency" as the amended version does, but the amended version also included "does not have legal tender status in any jurisdiction" in the definition. The change is presumably a reaction to El Salvador having made Bitcoin "legal tender" in that country. (See e.g. https://www.npr.org/2021/09/07/1034838909/bitcoin-el-salvador-legal-tender-official-currency-cryptocurrency).
2) See e.g., FAQ 551 (removed), where OFAC states that it would consider a certain virtual currency issued by the Venezuelan Government to be "new debt" of that Government. Similarly, one could expect any virtual current of which the creation or management is connected to an embargoed country to dealing in goods or...