US Treasury’s OFAC and FinCEN announce $29M in enforcement actions again Bittrex

Published at: Oct. 11, 2022

The United States Department of the Treasury’s Office of Foreign Assets Control and Financial Crimes Enforcement Network took enforcement actions against crypto exchange Bittex for allegedly violating sanctions programs as well as reporting requirements under the Bank Secrecy Act, or BSA.

In an Oct. 11 announcement, the U.S. Treasury said Bittrex had agreed to a more than $24-million settlement with OFAC for violations of “multiple sanctions programs” by failing to prevent individuals based in the Crimea region, Cuba, Iran, Sudan, and Syria from conducting roughly $263 million in crypto transactions between 2014 and 2017. According to the Treasury Department, Bittrex did not screen users based on accessible location information in the sanctioned countries using internet protocol addresses.

“When virtual currency firms fail to implement effective sanctions compliance controls, including screening customers located in sanctioned jurisdictions, they can become a vehicle for illicit actors that threaten U.S national security,” said Andrea Gacki, director of OFAC. “Virtual currency exchanges operating worldwide should understand both who — and where — their customers are."

In addition, FinCEN announced parallel enforcement actions in which Bittrex agreed to pay more than $29 million. However, the financial regulator said it will credit Bittrex’s $24-million payment “to settle its potential liability with OFAC.”

According to FinCEN, the crypto exchange “failed to maintain an effective AML program” from 2014 to 2018, “resulting in significant exposure to illicit finance” through privacy coins. The regulator further alleged Bittrex failed to document many transactions in sanctioned jurisdictions from 2014 to 2017 through suspicious activity reports.

Acting director of FinCEN Himamauli Das added:

“Virtual asset service providers are on notice that they must implement robust risk-based compliance programs and meet their BSA reporting requirements. FinCEN will not hesitate to act when it identifies willful violations of the BSA.”

Related: US Treasury sanctions Iran-based ransomware group and associated Bitcoin addresses

In December 2020, the U.S. Treasury announced a $98,830 settlement with BitGo over the digital asset custodian allowing residents of many of the same sanctioned jurisdictions — Crimea, Cuba, Iran, Sudan and Syria — to conduct crypto transactions between 2015 and 2019. In February 2021, the government department fined BitPay $507,375 for facilitating "approximately $129,000 worth of digital currency-related transactions with BitPay’s merchant customers" in sanctioned areas.

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