Bittrex Crypto Exchange Fined for US Sanction Evasion

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed a fine of about $24 million on crypto exchange Bittrex which also had to sign a $29 million settlement with the department’s Financial Crimes Enforcement Network (FinCEN). The fines are related to the exchange’s violations of anti-money laundering regulations and sanctions on the residents of certain countries and territories.

“As a result of deficiencies related to Bittrex’s sanctions compliance procedures, Bittrex failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria from using its platform to engage in approximately $263,451,600.13 worth of virtual currency-related transactions between March 2014 and December 2017,” the department said in a statement.

The applicable sanctions programs prohibit US persons from involvement in transactions with these jurisdictions, according to the statement.

The department said that, based on internet protocol (IP) address es collected from its customers, the exchange, which is based in Liechtenstein and Bermuda, had reason to assume that these users were located in jurisdictions that are subject to sanctions. 

“At the time of the transactions, however, Bittrex was not screening this customer information for terms associated with sanctioned jurisdictions. This information was not voluntarily self-disclosed,” according to the statement.

“For years, Bittrex’s AML program and SAR reporting failures unnecessarily exposed the U.S. financial system to threat actors,” commented Himamauli Das, FinCEN’s Acting Director. “Bittrex’s failures created exposure to high-risk counterparties including sanctioned jurisdictions, darknet markets, and ransomware attackers.”

“Since inception, Bittrex has strived to comply with all government requirements diligently and in good faith,” the exchange said in a statement obtained by The New York Times.