Bittrex, Inc., virtual currency exchange with headquarters in Bellevue, Washington, has reached settlements with the Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury for sums totaling over $24 million and $29 million, respectively.
These enforcement proceedings serve as a reminder to the virtual currency sector of the value of putting in place suitable risk-based sanctions compliance measures and abiding by BSA requirements.
OFAC Director Andrea Gacki said :
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.
Additionally, the fines are also related to the exchange’s violations of anti-money laundering rules and limitations on people of particular countries and territories. Bittrex failed to stop users from using its platform to participate in transactions worth roughly $263,451,600.13 in virtual currency. The transactions takes place between March 2014 and December 2017, the department stated in a statement.
It was due to shortcomings in Bittrex’s sanctions compliance procedures. In addition, the applicable sanctions programs, according to the statement, forbid US individuals from doing business with these nations.
Furthermore, the exchange, which has bases in Liechtenstein and Bermuda, had grounds to believe that these users were headquartered in countries subject to sanctions by the government based on internet protocol (IP) addresses acquired from its customers.
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Bittrex was not checking this client data for phrases connected to prohibited jurisdictions at the time of the transactions. It was stated in the statement that this information was not “voluntarily self-disclosed.”
Moreover, Himamauli Das, acting director of FinCEN, said:
For years, 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.