On October 11, the U.S. Treasury department’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) announced that it has settled charges with the cryptocurrency exchange Bittrex. The crypto exchange was accused of sanctions violations and failure to “implement effective sanctions compliance controls” between March 2014 and December 2017.
Crypto Exchange Bittrex Convicted of US Sanction Violations. Washington State Trading Platform Admits to Settle
The Washington State-based crypto asset exchange Bittrex has been charged by FinCEN and OFAC over “116,421 apparent violations of multiple sanctions programs.” According to the regulators from the U.S. Treasury department, the violations stemmed from transactions that were from “persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria.” U.S. officials say that the transactions added up to $263.45 million worth of crypto transactions that were in violation of America’s financial sanctions.
Andrea Gacki is the director of OFAC. She explained that virtual asset service provider (VASPs), who do not adhere to strong sanctions compliance can put the country at risk. “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,” Gacki remarked on Tuesday.
FinCEN raised red flags about possible sanctions evasion using crypto assets recently, March 2018. The year prior, FinCEN charged the crypto derivatives exchange Bitmex for “willful violations of the Bank Secrecy Act,” and said it assessed $100 million in penalties against the exchange. The U.S. Treasury department’s OFAC has also been busy during the last few years sanctioning crypto assets and more recently the regulator banned the ether mixing application Tornado Cash.
According to a New York Times report, OFAC was investigating Kraken, the crypto-exchange based in San Francisco, published July 20, 222. OFAC settled with Bitgo for $98,830 on December 30, 2020 over allegations of sanctions violations. Bitpay settled with the Treasury according to an OFAC notice on February 18, 2022, and the crypto payment processor agreed to “remit $507,375 to settle its potential civil liability.”
Bittrex will settle charges against FinCEN, OFAC, and FinCEN in relation to transactions from 2014-2017. FinCEN will credit part of the funds in accordance with the settlement agreement.
“Bittrex has agreed to remit $29,280,829.20 for its willful violations of the BSA’s AML program and SAR requirements. FinCEN will credit the payment of $24,280,829.20 as part of Bittrex’s agreement to settle its potential liability with OFAC,” the regulator’s notice discloses.
FinCEN details that between 2014 and 2017, Bittrex’s AML program failed to identify risks and the company failed to file any suspicious activity reports (SARs) during the three-year period. “Bittrex also failed to file SARs on a significant number of transactions involving sanctioned jurisdictions, including transactions that were suspicious above and beyond the fact that they involved a sanctioned jurisdiction,” FinCEN’s announcement concludes.
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