What Happened: OFAC settled with BitGo, Inc. for $98,830, resolving 183 apparent violations of multiple US sanctions programs for processing digital currency transactions on behalf of.
A NEW YEAR’S TALE OF CAUTION – OFAC Settlement Highlights Risks for Those Dealing in Digital Currencies Thursday, January 7, 2021
What Happened: OFAC settled with BitGo, Inc. for $98,830, resolving 183 apparent violations of multiple US sanctions programs for processing digital currency transactions on behalf of individuals located in sanctioned jurisdictions.
The Bottom Line: Companies providing digital currency services should be aware of sanctions risks and should implement compliance procedures sufficient to ensure that they do not deal with blocked persons or otherwise engage in transactions prohibited by sanctions. This action also cautions financial institutions subject to US jurisdiction of the sanctions risks associated with interacting with digital or crypto currency providers.
US Government Fines Bitgo for Allowing Users to Bypass Sanctions With Cryptocurrency
The U.S. Office of Foreign Assets Control has fined Bitgo for failing to prevent users in sanctioned countries from using its crypto wallet service. The agency says Bitgo processed 183 cryptocurrency transactions that were “apparent violations of multiple sanctions programs.”
US Treasury Alleges Bitgo Allows Users to Bypass Sanctions
The U.S. Department of the Treasury announced on Wednesday that the Office of Foreign Assets Control (OFAC) has entered into a $98,830 settlement with Bitgo “for 183 apparent violations of multiple sanctions programs.” Bitgo offers cryptocurrency wallet services. According to the announcement:
By Kyle Brasseur2020-12-31T15:12:00+00:00
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Wednesday announced a settlement with digital asset platform BitGo for lapses in its sanctions compliance procedures that led to 183 apparent violations of multiple sanctions programs.
BitGo will pay $98,830 to settle its liability after individuals located in the sanctioned regions of Crimea (Ukraine), Cuba, Iran, Sudan, and Syria were able to access its digital currency services. OFAC deemed the case “non-egregious,” and the penalty represents a tiny fraction of the $53 million maximum in the matter.
The details: Between March 2015 and December 2019, BitGo allegedly tracked the location of user IP addresses for account security but did not utilize the information for sanctions compliance purposes. Thus, as OFAC explained in its Web notice, individuals in the sanctioned regions listed above were able to access certain services, resulting in 183 digital curre
BitGo settles with US Treasury over sanctions violations in Iran, Syria and Cuba The settlement repeats the Treasury s message that crypto companies will need to know their customers. 9484 Total views News
The U.S. Treasury has settled with BitGo over charges that it facilitated users in sanctioned areas to transact using its crypto wallet services between 2015 and 2019.
BitGo, an institutional crypto custodian service and wallet operator, did not do due diligence in blocking wallet users based in Crimea, Cuba, Iran, Sudan and Syria, said the Treasury s Office of Foreign Asset Controls in a Dec. 30 announcement. OFAC said of BitGo: BitGo failed to exercise due caution or care for its sanctions compliance obligations when it failed to prevent persons apparently located in sanctioned jurisdictions to open accounts and send digital currencies via its platform as a result of a failure to implement appropriate, risk-based sanctions compliance controls.