Crypto Sanctions Evasion Risks: Up to 30‑Year Prison Sentences

Crypto Sanctions Evasion Risks: Up to 30‑Year Prison Sentences

When regulators talk about cryptocurrency sanctions evasion is the illegal use of crypto‑assets to bypass international financial sanctions, they’re signaling a shift from civil fines to prison terms that can stretch decades.

Quick Take

• Violating sanctions with crypto can trigger up to 30 years in prison.
• U.S. and U.K. agencies now treat crypto like any other asset for sanctions compliance.
• Major cases in 2025 (OKX, Evita) demonstrate multi‑count indictments that add up to decades.
• Effective AML/KYC and blockchain analytics are now essential to avoid criminal liability.
• Senior executives face personal criminal exposure if compliance is lax.

Why crypto matters to sanctions enforcement

Crypto’s borderless nature lets bad actors move value instantly, hiding behind pseudonymous addresses. That’s exactly why the Office for Financial Sanctions Implementation (OFSI) the UK body that enforces sanctions upgraded its threat assessment in July 2025, declaring crypto‑assets “treated like any other asset”. The message is clear: you can’t claim ignorance because the blockchain is decentralized.

In the United States, the U.S. Department of Justice (DOJ) the federal agency prosecuting financial crimes has filed billions of dollars in fines and is now pursuing criminal charges that combine wire fraud, money laundering, and specific sanctions violations. When those charges stack, the statutory maximum quickly eclipses 30 years.

How the law adds up to a 30‑year term

Each count carries its own maximum:

1. Conspiracy - up to 20 years.
2. Money laundering - up to 20 years.
3. Bank fraud - up to 30 years per count.
4. Wire fraud - up to 20 years per count.
5. Specific sanctions violation (e.g., under 18 U.S.C. § 2324) - up to 30 years.

Prosecutors often charge several counts and ask that sentences run consecutively. In the Evita case, the indictment listed wire fraud, bank fraud, and sanctions evasion, each with a 20‑30‑year ceiling. When a judge follows the federal guidelines, the total exposure can surpass three decades.

2025 case studies that set the tone

OKX - The Seychelles‑based exchange was hit with a $500million civil penalty and a criminal indictment after the DOJ uncovered $5billion in suspicious flows. Employees instructed U.S. users to submit fake IDs, directly violating sanctions on Russia and Iran. The company pleaded guilty to multiple AML failures, and several executives now face potential prison terms that could add up to 30 years.

Iurii Gugnin - Founder of Evita a crypto‑payments platform, Gugnin was indicted for wire fraud, bank fraud, operating an unlicensed money‑transmitting business, and sanctions evasion involving over $500million sent to Russian entities. The multi‑count indictment alone opens the door to a cumulative sentence well beyond three decades.

The U.S. also pursued a civil forfeiture action against North Korean actors, seeking to seize $7.74million in crypto that had been funneled through a network of “laundromat” wallets. While that case focused on asset seizure, it underscored the DOJ’s willingness to blend criminal and civil tools.

Penalty landscape: Civil fines vs. criminal sentences

What compliance teams must do today

Regulators no longer accept “passive” screening. Here’s a practical checklist that aligns with OFSI and OFAC expectations:

• Integrate real‑time blockchain analytics (e.g., Chainalysis, CipherTrace) into your transaction pipeline.
• Maintain an up‑to‑date sanctions address list - OFAC added 86 crypto addresses in 2024 alone.
• Implement “Failure to Prevent Fraud” controls: regular audits, documented escalation procedures, and senior‑level oversight.
• Require robust KYC for every wallet address, even for “self‑custody” users, and file Suspicious Activity Reports (SARs) within 30 days of detection.
• Train staff on how to spot attempts to circumvent bans (e.g., fake IDs, offshore entities, mixers).
• Conduct annual mock investigations to test your response plan against a sanctions evasion scenario.

Skipping any of these steps puts both the firm and its executives at risk of criminal referral.

Future enforcement trends

Expect three key developments over the next two years:

1. Broader use of RICO‑style prosecutions. Prosecutors will bundle crypto evasion into larger criminal enterprises, allowing longer sentences.
2. Mandatory sanctions screening in AML software. Vendors will have to embed OFAC and OFSI address lists directly into transaction monitoring modules.
3. Personal liability for CEOs. Both U.S. and U.K. guidance now state that senior officers can be charged if “reasonable procedures” are missing.

Companies that act now-by upgrading analytics, tightening KYC, and documenting oversight-stand a far better chance of avoiding the kind of headline‑making indictments we saw in 2025.

Quick compliance checklist (downloadable)

• Real‑time blockchain watchlist integration
• Daily sanctions address updates
• Documented escalation flowchart
• Quarterly SAR filing reviews
• Executive sign‑off on compliance policies