Coinbase-OFAC Bug Affected Fewer Than 100 People and Has Been Fixed

Some users on Reddit reported bitcoin transfers to Coinbase from Binance were being blocked due to potential sanctions concerns.

AccessTimeIconMar 8, 2023 at 3:18 a.m. UTC
Updated May 9, 2023 at 4:09 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

A Coinbase technical issue led to certain transfers of bitcoin from Binance being blocked.

Users on Reddit and Twitter were reporting late Tuesday that attempts to transfer bitcoin from Binance to Coinbase were being met with an Office of Foreign Assets Control (OFAC) notice that said their transfer was being blocked because it was coming from an “OFAC sanctioned address.”

  • Why Worldcoin Is Launching a Layer 2
    20:07
    Why Worldcoin Is Launching a Layer 2
  • Polymarket Traders Bet on Fed Rate Cuts; Bitcoin Spot ETFs Register Five-Day Withdrawals Streak
    02:17
    Polymarket Traders Bet on Fed Rate Cuts; Bitcoin Spot ETFs Register Five-Day Withdrawals Streak
  • Base Monthly Active Addresses Increased by 160% in March: Nansen
    00:50
    Base Monthly Active Addresses Increased by 160% in March: Nansen
  • Bitcoin Halving: We Answer Your Questions
    04:16
    Bitcoin Halving: We Answer Your Questions
  • A spokesperson for Coinbase acknowledged that this was a technical issue that impacted fewer than 100 people, and has been fixed. Coinbase sent affected users an email saying the deposit will be credited to their account shortly.

    OFAC maintains a lengthy list of crypto wallets and protocols that have been classified as “specifically designated nationals” and sanctioned, meaning that U.S.-based entities are not allowed to interact with them.

    Conceivably, a data entry error could have caused this problem.

    In August 2022, the crypto mixer Tornado Cash was added to the sanction list. Tornado Cash has been repeatedly used to try and obscure the destinations of hacked crypto, including by North Korea.

    Coinbase is currently backing a lawsuit to try and compel the U.S. Treasury Department to reverse its decision on Tornado Cash.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.