The U.S. Department of the Treasury announced a penalty of $53 million on cryptocurrency exchange Bittrex for "apparent violations of sanctions and anti-money laundering obligations."
What Happened: Bittrex has made 116,421 apparent violations of multiple sanctions programs, said the Department of Treasury. The cryptocurrency exchange allowed customers in Cuba, Iran, Sudan, Syria and the Crimea region of Ukraine to make crypto transactions worth more than $263 million.
The U.S. Department of the Treasury’s Office of Foreign Assets Control and Financial Crimes Enforcement Network announced a fine of $24 million and $29 million, respectively, on Bittrex.
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“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 OFAC Director Andrea Gacki.
“Virtual currency exchanges operating worldwide should understand both who — and where — their customers are," added Gacki.
Why It's Important: The applicable sanctions programs generally prohibit U.S. persons from engaging in transactions with these jurisdictions. The government said that based on the internet protocol address information and physical address information, Bittrex should know that these users were located in jurisdictions subject to sanctions.
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“At the time of the transactions, however, Bittrex was not screening this customer information for terms associated with sanctioned jurisdictions,” read the statement from the U.S. Department of Treasury.
“For years, Bittrex’s AML program and SAR reporting failures unnecessarily exposed the U.S. financial system to threat actors,” said FinCEN Acting Director Himamauli Das, adding, “Bittrex’s failures created exposure to high-risk counterparties including sanctioned jurisdictions, darknet markets, and ransomware attackers.”
Bittrex is a cryptocurrency exchange platform that enables the trading of assets like Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE).
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