Crypto exchange Bittrex will pay $29 million for violating U.S. sanctions, the Treasury Department said on Tuesday.
"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 Treasury Department said in a release.
Bittrex has agreed to pay $24.3 million to the Treasury Department’s Office of Foreign Assets Control (OFAC) to settle its potential civil liability for over 116,000 apparent violations of multiple sanctions programs. It will pay an additional $5 million to the Treasury.
The U.S. said Bittrex should have been aware these customers were located in sanctioned parts of the world due to their physical address information – like an Iranian passport – as well as their IP addresses.
"When virtual currency firms fail to implement effective sanctions compliance controls, including screening customers located in sanctioned jurisdictions, they can become a vehicle for illicit actors that threaten U.S national security," OFAC Director Andrea Gacki said. "Virtual currency exchanges operating worldwide should understand both who – and where – their customers are. OFAC will continue to hold accountable firms, in the virtual currency industry and elsewhere, whose failure to implement appropriate controls leads to sanctions violations."
"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," the department wrote.
The agency said it was OFAC's largest virtual currency enforcement action to date.
The Treasury Department also said – in addition to apparent violations of multiple sanctions programs – an investigation by its Financial Crimes Enforcement Network found "willful violations of the Bank Secrecy Act’s (BSA’s) anti-money laundering (AML) and suspicious activity report (SAR) reporting requirements."
A request for comment from Bellevue, Washington-based Bittrex was not returned.
The Associated Press contributed to this report.