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Finance

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.

By Sam Reynolds
AccessTimeIconMar 8, 2023 at 3:18 a.m. UTC
Updated May 9, 2023 at 4:09 a.m. UTC
(Chesnot/Getty Images)
(Chesnot/Getty Images)

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.”

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    • 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.