Crypto exchange Bittrex is settling with the U.S. Treasury and the Financial Crimes Enforcement Network (FinCEN) to the tune of $53 million.
According to a press release, the Treasury’s Office of Foreign Assets Control (OFAC) and FinCEN have charged Bittrex with violating sanctions and anti-money laundering (AML) obligations.
Bittrex faces fines of $24 million from OFAC, and $29 million from FinCEN, in what is the first joint enforcement action between the two regulatory agencies.
Investigations into Bittrex found violations of multiple sanctions programs, and “willful” violations of the Bank Secrecy Act’s AML and suspicious activity report (SAR) reporting requirements.
Specifically, Bittrex was found to have failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan and Syria from using the exchange to conduct approximately $263,451,600 worth of crypto transactions between March 2014 and December 2017.
The Treasury says Bittrex should’ve have known the transactions were coming from the sanctioned areas based on IP addresses, but failed to act.
OFAC Director Andrea Gacki said such violations threaten national security.
“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 US national security… Virtual currency exchanges operating worldwide should understand both who – and where – their customers are. OFAC will continue to hold accountable firms, in the virtual currency industry and elsewhere, whose failure to implement appropriate controls leads to sanctions violations.”
FinCEN Acting Director Himamauli Das said that Bittrex’s AML program and SAR reporting failures “unnecessarily exposed the U.S. financial system to threat actors.”
“Bittrex’s failures created exposure to high-risk counterparties including sanctioned jurisdictions, darknet markets, and ransomware attackers. 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.”
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