When you run an AML check on a crypto wallet, the report mentions both OFAC and FATF. They sound similar but they are fundamentally different things — one is a sanctions blacklist, the other is a global policy body. Here's what each one means for you.
OFAC (Office of Foreign Assets Control) is a US Treasury agency that administers economic and trade sanctions. It maintains the Specially Designated Nationals (SDN) list — a list of individuals, companies, and addresses that US persons and companies are prohibited from transacting with.
For crypto, OFAC has added specific wallet addresses to the SDN list — including Tornado Cash contracts, addresses linked to Lazarus Group (North Korea), and wallets tied to ransomware operations. Transacting with an OFAC-sanctioned address is a federal crime in the United States.
In an AML report, an 'OFAC hit' means the wallet you checked is directly on the SDN list. This is the most serious flag — it requires immediate action from any regulated financial institution.
FATF (Financial Action Task Force) is an intergovernmental body that sets global standards for combating money laundering and terrorist financing. It does not maintain a sanctions list. Instead, it publishes Recommendations — policy frameworks that member countries (40+ jurisdictions) are expected to implement through domestic legislation.
The most relevant FATF standards for crypto are: Recommendation 15 (virtual assets and VASPs), Recommendation 16 (the Travel Rule — sharing originator/beneficiary data for transfers above threshold), and FATF typologies (documented patterns of how criminals use crypto).
In an AML report, 'FATF typology exposure' means the wallet's transaction patterns match documented money laundering techniques — such as mixer usage, peel chains, or rapid fund cycling. It's a risk signal, not a blacklist hit.
| Aspect | OFAC | FATF |
|---|---|---|
| Type | US federal agency + blacklist | Intergovernmental policy body |
| Jurisdição | United States (+ de facto global) | 40+ member countries |
| Crypto tool | SDN list — specific wallet addresses | Typologies — behavior patterns |
| In AML report means | Direct blacklist hit — serious | Pattern match — context required |
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