Bittrex is in trouble with the United States Treasury Department for a total of $29 million

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Last Updated on October 12, 2022 by Bitfinsider

Because FinCEN has indicated that it will apply the amount paid to OFAC towards the overall fine that they levied, Bittrex will be required to pay a total of $29 million in fines. The sanctions that have been imposed on a cryptocurrency exchange are the harshest that the Treasury Department has ever levied.

Authorities now have the responsibility of evaluating risks in an environment that is for the most part uncontrolled as a result of the growth of cryptocurrencies and other virtual assets over the past few years. This is because these assets have become more intertwined with the regulated financial system.

An audit conducted by OFAC and FinCEN revealed several sanction programs had obvious violations, in addition to deliberate violations of the Bank Secrecy Act’s (BSA) anti-money laundering (AML) and suspicious activity report (SAR) disclosure rules. These criminal proceedings have brought to the attention of those involved in the cryptocurrency industry the importance of having suitable risk-based sanctions regulatory guidelines and maintaining BSA requirements.

In the event that nothing is done, cooperation may violate the regulations set forth by OFAC and FinCEN, and platforms and other participants in the cryptocurrency business may be vulnerable to criminal exploitation.

The director of OFAC, Andrea Gacki, has stated that cryptocurrency companies run the risk of becoming a platform for illegal actors that threaten the national security of the United States if they do not implement effective sanctions compliance controls. Some of these controls include vetting customers who have established themselves in sanctioned countries.

Bittrex has consented to pay OFAC the sum of $24,280,829.20 in order to settle the potential legal ramifications that could arise from 116,421 apparent violations of various sanctions programs. Between March 2014 and December 2017, Bittrex enabled users of its platform to engage in transactions involving virtual currencies with a total value of approximately $263,451,600.13. This was made possible due to flaws in the company’s systems for complying with sanctions. It is believed that these users originated from the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria respectively.

Under the relevant sanctions, it was typically prohibited for United States citizens to engage in commercial activity with the countries in question. Based on the IP address information and physical address information that Bittrex obtained about each client while onboarding, Bittrex has reasons to believe that these customers were based in countries that are subject to sanctions.

Nevertheless, during the time of the transactions, Bittrex did not conduct a search of this customer data for phrases that were associated with restricted areas. This information was divulged to others against the individual’s will.

Bittrex has admitted liability and agreed to pay a settlement of $29,280,829.20 as a result of its flagrant violations of the BSA’s AML program and SAR standards. FinCEN will credit the amount of $24,280,829.20 as part of the settlement it reached with OFAC to resolve its prospective responsibility with the organization. The findings of FinCEN’s review indicate that from February 2014 until December 2018, Bittrex had an inadequate anti-money laundering procedure. Due to the platform’s inadequate payment processing, a significant amount of unlawfully obtained funds were made public.

In addition, because of the increased anonymity, the AML procedure that Bittrex uses does not adequately address the risks that are associated with the company’s products and services, particularly digital currencies. Bittrex did not file any SARs during the period that spanned more than three years, which began in February 2014 and ended in May 2017.

In addition, Bittrex failed to file Suspicious Activity Reports (SARs) for a sizeable number of transactions that involved restricted locations. These transactions included those that lacked any other reason to suspect illegal activity.


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