United States-based crypto exchange Bittrex will pay $53 million to the Treasury’s department of the U.S. Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) for violating multiple aspects of the Bank Secrecy Act.
According to a Tuesday report by the Treasury Department, joint investigations by the two regulatory bodies found that Bittrex was guilty of willfully violating a considerable number of sanctions programs and requirements for years. Hence, the crypto exchange will pay $53 million for its violations, $24 million of which would be paid to the OFAC and the remaining $29 million to FinCEN.
Bittrex Violated Anti-Money Laundering Laws
Per the report, investigations by the OFAC found that Bittrex disobeyed the sanctions law that prohibited U.S. citizens and companies from engaging in business transactions with certain countries.
A few years back, U.S. authorities imposed economic sanctions on countries located in the Crimea region, banning its citizens and businesses from executing business deals with the stated jurisdictions.
The report noted that between the periods of March 2014 and December 2017, Bittrex disregarded this law by availing its platform for users in Ukraine, Cuba, Iran, Sudan, and Syria, (countries located in the Crimea region), to conduct approximately $263 million worth of digital asset-related transactions.
According to the CFTC, Bittrex had enough reasons to know that these users were located in jurisdictions subject to sanctions. The regulatory body pointed out that Bittrex had access to the internet protocol (IP) address information and the physical address information of each customer.
Bittrex Failed to Report Suspicious Transactions
Further investigations by FinCEN also revealed that Bittrex failed to meet the Suspicious Activity Report (SAR) requirements by not submitting reports on a significant number of questionable transactions for three years.
Bittrex also inadequately monitored transactions conducted through the platform, thus exposing the U.S. financial system and others in the digital asset industry to potential abuse by bad actors, the report added.
“For years…Bittrex 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,” commented Himamauli Das, FinCEN’s acting director.
