The U.S. Treasury Department’s Office of Foreign Assets Control removed 76 entries from its Specially Designated Nationals and Blocked Persons List on May 28, in one of the agency’s most significant list-maintenance efforts in years.

The SDN List is one of the U.S. government’s main sanctions tools. U.S. persons are generally prohibited from dealing with listed individuals and entities, and property subject to U.S. jurisdiction must be blocked. Because the list is used widely in automated compliance screening, accuracy and timely maintenance matter for both enforcement and legitimate commerce.

The removals focused on entries that an interagency review determined no longer posed a current risk to U.S. interests, including deceased individuals, decommissioned vessels, and dissolved illicit networks. The action reflects a broader effort to modernize a sanctions system that has expanded sharply in recent years.

Why the SDN List expanded

Annual new designations on the SDN List increased from roughly 880 in 2017 to more than 3,000 in 2024, a nearly fourfold rise over seven years. That expansion was not matched by an equivalent effort to remove entries that had become outdated or no longer served their original purpose.

Each SDN List entry adds screening obligations for financial-sector firms. Banks, brokerages, payment processors, and crypto exchanges are among the entities that must check transactions and customers against the list. A larger list can increase false positives, which in turn can require additional compliance reviews, delay transactions, and raise operational costs that may be passed on to customers.

Treasury Secretary Scott Bessent announced the modernization initiative at the “No Money For Terror” conference in Paris. He framed the effort as a shift in approach, with sanctions treated as tools designed to influence behavioral change rather than as permanent measures by default.

Implications for crypto compliance

No crypto-related entities or tokens were included in this delisting round. However, the broader review is relevant to crypto firms because OFAC screening is a major part of compliance operations across the digital asset sector.

OFAC has played a prominent role in crypto regulation in recent years. Its 2022 sanctioning of Tornado Cash drew significant attention across the industry and raised questions about whether software code could be sanctioned in the same way as individuals and companies.

For crypto compliance teams that allocate substantial resources to screening against the SDN List, the removal of outdated entries may reduce false positives. Each false positive can trigger a review process that consumes time and money. Reducing outdated entries may allow compliance teams to focus more directly on actual suspicious activity rather than investigating names or entities that have not been relevant for years.

The review also highlights a practical distinction for digital asset firms: sanctions compliance is not limited to headline designations involving crypto addresses or protocols. Exchanges, custodians, wallet providers, and payment companies still screen names, counterparties, vessels, corporate entities, and other identifiers that appear across the broader SDN List.

Compliance cost considerations

The rise from roughly 880 annual designations in 2017 to more than 3,000 in 2024 did not come with a corresponding increase in resources for the companies required to comply with sanctions screening obligations. Banks and other financial institutions absorbed those costs and, in many cases, passed them downstream.

The Treasury has said its aim is to reduce false positives in screening processes across financial institutions. That change could lower compliance burdens for both traditional financial firms and crypto companies that rely on sanctions-screening systems as part of their day-to-day operations.