The cryptocurrency exchange, Bittrex has been imposed with a civil money penalty totaling $29 million by the Financial Crimes Enforcement Network (FinCEN), for violating the Bank Secrecy Act (BSA). The action is also a part of a global settlement with the Office of Foreign Assets Control (OFAC).


The announcement comes as FinCEN found that Bittrex failed to maintain an effective anti-money laundering (AML) program that would effectively address the risks associated with its products.


“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,” said Das.


In the same time frame from 2014 to 2017, the investigation found that Bittrex failed to have filed a significant amount of suspicious activity reports (SAR) to government agencies, while allegedly having only two employees in charge of said reports.


Bittrex was also found to have been operating illegally in sanctioned countries such as Iran, Cuba, Sudan, Syria, and the Crimea region of Ukraine, with transactions totaling over $260 million in these areas.


“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,” said OFAC Director Andrea Gacki. 


“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.”

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Jose Rascon
Jose Rascon
Jose Rascon is a MeriTalk Staff Reporter covering the intersection of government and technology.