US enforcement agency OFAC (Office of Foreign Assets Control) has issued its largest virtual currency enforcement action to date, fining Washington-based cryptocurrency exchange Bittrex US$24mln for sanctions violations.
As per the settlement announcement, “Bittrex failed to prevent persons apparently located in the sanctioned jurisdictions from using its platform to engage in over $263mln worth of virtual currency-related transactions”.
Cuba, Iran, Sudan, Syria and Ukraine-related sanctions were violated between 2014 and 2017, with illegal transactions exceeding US$263mln.
The Financial Crimes Enforcement Network (FinCEN) also issued a US$29mln for anti-money laundering violations, but the OFAC fine was credited since the violations stemmed from similar underlying conduct.
“Since inception, Bittrex has strived to comply with all government requirements diligently and in good faith,” Bittrex said in a statement, adding that the company is “pleased to have fully resolved this matter”.
Bittrex relied on just two employees to screen an average of 23,800 transactions per day for suspicious activity, according to FinCEN.
FinCEN noted that Bittrex has since increased compliance staffing and training, and it continues to develop and implement new policies and procedures, including the purchase and integration of several automated transaction monitoring systems.
But the large fine stands as a warning sign for startups operating in the “wild west” of the crypto sector- the regulators are becoming more adept at sniffing out violations, particularly in the on-ramp and off-ramp spheres.