Bittrex to Pay $30M in US Treasury Sanctions for Settlement

• Bittrex will pay the U.S. Treasury Department’s sanctions

• US Treasury alleged that it maintained a poor compliance program between 2014 and 2017.
• Bittrex acknowledged that it had allowed users from sanctioned jurisdictions

Bittrex, a cryptocurrency exchange, agreed to pay just under $30 million in fines and keep a closer eye on its compliance program as part of a settlement with the United States Treasury Department over allegations that it had accidentally violated federal sanctions.

The settlements were made public on Tuesday by the Financial Crimes Enforcement Network (FinCEN), the watchdog for the Treasury’s money laundering, and the Office of Foreign Assets Control (OFAC), the federal government’s sanctions enforcer.

OFAC stated that Bittrex has already remedied these issues in addition to the monetary sanctions. The settlement says that between 2014 and the end of 2017, Bittrex let around 1,800 people in sanctioned countries like Iran, Cuba, Sudan, Syria, and Crimea use its platform to do more than 116,000 transactions worth about $260 million.

Bittrex claimed that it maintained anti-money laundering and sanctions compliance processes

Since then, the exchange in Seattle, Washington, has taken steps to better comply with sanctions blacklists. The Office of Foreign Assets Control (OFAC) enforces a number of comprehensive sanctions that prohibit U.S. citizens and anyone on U.S. soil from interacting with or providing services to people in these jurisdictions.

Bittrex acknowledged a few years ago that it had permitted Iranian and other sanctioned users to sign up for its platform. In 2019, the exchange made an offer to some of these customers to return their funds.

Bittrex stated in a statement that it utilized unidentified third parties and service providers to assist it in verifying accounts and screening for sanctions compliance. Additionally, Bittrex maintained processes for anti-money laundering and sanctions compliance.

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FinCEN fined Bittrex $29.8M, but said it would credit the exchange’s $24 million OFAC fine

While OFAC focused on the alleged sanctions violations, the FinCEN settlement focused on Bittrex’s alleged failure to file suspicious activity reports (SARs) during that same time period.

According to FinCEN, Bittrex “failed to file” SARs for 200 transactions involving cryptocurrency worth more than $140,000 and 22 transactions involving more than $1 million.

According to FinCEN, Bittrex failed to implement effective transaction monitoring on its trading platform, relying on as few as two employees with minimal anti-money laundering training and experience to manually review all of the transactions for suspicious activity, which at times were over 20,000 per day” and”Bittrex failed to implement effective transaction monitoring on its trading platform.

Bittrex was fined $29.8 million by FinCEN, but the agency said it would credit the exchange’s $24 million OFAC fine, so the company will only have to pay just under $30 million in total.

Bittrex stated that it was pleased to have settled the charges in a statement that it sent through a company attorney.

The statement read, “The settlement provides full resolution of both OFAC’s inquiry into transactions in sanctioned jurisdictions that predominantly occurred through 2017 and FinCEN’s assertion that Bittrex did not fully implement all of its Anti-Money Laundering Program controls through 2018.”Importantly, both OFAC and FinCEN recognize that Bittrex’s persistent responsive remedial efforts have significantly reduced the likelihood of future violations.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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