U.S Authorities Charge Bittrex With Violation of Sanctions

• According to OFAC head Andrea Gacki, national security is put at risk.
• Bitmex, a crypto derivatives exchange, was fined $100 million by FinCEN last year.

Bittrex, a cryptocurrency exchange situated in Washington State, was hit with charges from the Financial Crimes Enforcement Network and the Office of Foreign Assets Control (OFAC) for “116,421 apparent violations of multiple sanctions programs.” 

In accordance with the Treasury Department, the illegal activity included “persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria.” The total value of the transactions, according to U.S. authorities, was $263.45 million, making them a breach of American financial restrictions against the use of cryptocurrency.

Multiple Exchanges Scrutinized

According to OFAC head Andrea Gacki, national security is put at risk when virtual asset service providers (VASPs) do not use robust sanctions compliance.

Gacki stated:

“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.”

In March of this year, FinCEN raised alarm bells about the possible use of cryptocurrency for sanction evasion. Bitmex, a crypto derivatives exchange, was fined $100 million by FinCEN last year for “willful violations of the Bank Secrecy Act,” charges that were brought by the agency the year before. The Office of Foreign Assets Control (OFAC) of the United States Treasury has also been active in recent years, banning the ether mixing application Tornado Cash.

Bitgo paid OFAC $98,830 to resolve charges of violating sanctions on December 30, 2020. Bitpay, a cryptocurrency payment processor, reached a settlement with the Treasury on February 18, 2022, when it agreed to “remit $507,375 to settle its potential civil liability,” according an OFAC notification.

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