Round Up: Treasury Announces Two Enforcement Actions for over $24M and $29M Against Virtual Currency Exchange Bittrex, Inc

Treasury Announces Two Enforcement Actions for over $24M and $29M Against Virtual Currency Exchange Bittrex, Inc.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) announced settlements for over $24 million and $29 million, respectively, with Bittrex, Inc. (Bittrex), a virtual currency exchange based in Bellevue, Washington. This is OFAC’s largest virtual currency enforcement action to date.  It also represents the first parallel enforcement actions by FinCEN and OFAC in this space. Investigations by OFAC and FinCEN found apparent violations of multiple sanctions programs and willful violations of the Bank Secrecy Act’s (BSA’s) anti-money laundering (AML) and suspicious activity report (SAR) reporting requirements. These enforcement actions emphasize to the virtual currency industry the importance of implementing appropriate risk-based sanctions compliance controls and meeting obligations under the BSA… Read the full press release here: https://home.treasury.gov/news/press-releases/jy1006

Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Bittrex, Inc.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a settlement with Bittrex, Inc., a private company based in Bellevue, Washington that provides an online virtual currency exchange and hosted wallet services.  Bittrex agreed to remit $24,280,829.20 to settle its potential civil liability for apparent violations of sanctions against Cuba, Ukraine-related, Iran, Sudan, and Syria… Read the full press release here: https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221011

FinCEN Announces $29 Million Enforcement Action Against Virtual Asset Service Provider Bittrex for Willful Violations of the Bank Secrecy Act

The Financial Crimes Enforcement Network (FinCEN) has assessed a civil money penalty in the amount of $29,280,829.20 against Bittrex, for violations of the Bank Secrecy Act (BSA) and FinCEN’s implementing regulations.  FinCEN’s action is part of a global settlement with the Office of Foreign Assets Control (OFAC).

“For years, Bittrex’s AML program and SAR reporting failures unnecessarily exposed the U.S. financial system to threat actors,” said FinCEN Acting Director Himamauli Das. “Bittrex’s failures created exposure to high-risk counterparties including sanctioned jurisdictions, darknet markets, and ransomware attackers. Virtual asset service providers are on notice that they must implement robust risk-based compliance programs and meet their BSA reporting requirements. FinCEN will not hesitate to act when it identifies willful violations of the BSA.”

FinCEN’s investigation found that, from February 2014 through December 2018, Bittrex failed to maintain an effective AML program. Bittrex’s program failed to appropriately address the risks associated with the products and services it offered, including anonymity-enhanced cryptocurrencies.

Bittrex failed to implement effective transaction monitoring on its trading platform, relying on as few as two employees with minimal anti-money laundering training and experience to manually review all of the transactions for suspicious activity, which at times were over 20,000 per day… Read the full press release here: https://www.fincen.gov/news/news-releases/fincen-announces-29-million-enforcement-action-against-virtual-asset-service

FinCEN’s Consent Order Imposing Civil Money Penalty