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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
PARIS, FRANCE - FEBRUARY 26: In this photo illustration, the Coinbase cryptocurrency exchange logo (C) is seen on the screen of an iPhone on February 26, 2021 in Paris, France. Cryptocurrency trading platform Coinbase has filed for registration with the SEC on Thursday for an IPO via direct listing on the Nasdaq and will likely be the largest IPO of the year. Coinbase reported $ 1.28 billion in revenue in 2020 (+ 140% year on year), for net profit of $ 320 million. (Photo illustration by Chesnot/Getty Images)

(Chesnot/Getty Images)

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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.”

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.

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