A First Dive into OFAC in DeFi Space

51% of Ethereum Blocks are OFAC Censored was one of the annual headlines in the year 2022. Short for Office of Foreign Assets Control, OFAC, as a division of the U.S. Treasury Department, made itself go on the stage of decentralized finance (DeFi). OFAC was originally established to impose economic sanctions on threats to the United States national security. The jurisdiction of OFAC today, however, seems to be stretching further and further. In this work, we provide the first dive into OFAC in the DeFi space. We describe how OFAC specifically implements its sanctions, namely, on chains (in particular, Ethereum 2.0 as an example), on cryptocurrencies, and on decentralized applications. We discuss the impacts of the presence of OFAC intervention and identify future directions for DeFi products based on this fact.