Another crypto firm hit with fines for violating U.S. sanctions

Published at: Feb. 18, 2021

BitPay will have to pay the U.S. Treasury's Office of Foreign Asset Control over half a million dollars for crypto services to sanctioned regions. 

In a Feb. 18 announcement of the settlement, OFAC said that BitPay had facilitated "approximately $129,000 worth of digital currency-related transactions with BitPay’s merchant customers" by users from Crimea, Cuba, North Korea, Iran, Sudan and Syria — effectively the full range of geographical sanctions that OFAC has in place. 

OFAC repeated that crypto firms need to align themselves with sanctions programs, saying: 

"This action emphasizes that OFAC obligations apply to all U.S. persons, including those involved in providing digital currency services."

The 2,102 transactions that OFAC cites reportedly occurred between 2013 and 2018, during which time the office says that BitPay, which provides crypto-enabled transactions between customers and merchants, screened only merchants.

Despite adding IP address info about customers in 2017, OFAC says that BitPay did not analyze that information to identify users in sanctioned locations until much later.

OFAC reached a similar settlement with BitGo at the end of 2020. While neither featured crippling fines, the office, which oversees all U.S. sanctions, is clearly sending a message to the crypto world. 

While a number of sanctioned jurisdictions have expressed interest in using crypto to evade them, projects like Venezuela's Petro token have not caught on.

Tags
Related Posts
Venezuela ramps up Bitcoin payments for imports from Iran and Turkey
According to an investigative report from RunRun.es, Venezuela intends to increase its use of Bitcoin to pay for imports to bypass financial sanctions imposed by the United States. RunRun.es, which was founded by Venezuelan investigative journalist Nelson Bocaranda, cited anonymous sources from the country’s central bank who claim that “payments to companies from allied countries such as Iran and Turkey have been made using Bitcoin.” It is unclear, what these imports consist of, however, Turkey and Iran currently provide the country food and fuel in exchange for gold. Venezuela President Nicolás Maduro's government has promoted its state-issued, purportedly oil-backed ‘Petro’ …
Bitcoin / Dec. 10, 2020
US Government Puts Out $5 Million Bounty for Petro Supervisor
The United States government has put Joselit Ramirez Camacho, the Venezuelan government’s superintendent of the Petro cryptocurrency, on its Most Wanted List. According to a June 1 statement, the Homeland Security Investigations branch of the U.S. Immigration and Customs Enforcement agency issued a bounty for up to $5 million for any information that would lead to the capture of Petro’s supervisor. This was done following an investigation by the HSI’s New York office. The authorities allege that Ramirez Camacho has “deep political, social and economic ties” to suspected narcotic kingpins, one of whom is Tareck El Aissami, former Vice President …
Regulation / June 2, 2020
Iran One-Ups the United States? Tehran Seeks Crypto Mining Dominance
Crypto mining in Iran is set to become even bigger with the government giving the green light for power plants to mine cryptocurrencies like Bitcoin (BTC). The news is the latest piece of positive development on the virtual currency mining front to come out of the country in the last year. Since legalizing crypto mining back in July 2019, Iranian authorities have sought to ensure market participants operate only after obtaining the required licenses. By allowing power plants to engage in cryptocurrency mining, Iran is joining other emerging hubs as the global “hash wars” gathers pace. Iran has seen an …
Bitcoin / Aug. 7, 2020
EU will cut off 7 Russian banks from SWIFT, with ordinary Russians facing consequences
On Wednesday, the European Union announced that within 10 days, it intends to remove seven Russian banks from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, messaging system. The list of sanctioned banks includes Russia's second-largest bank VTB, Bank Otrkitie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, and VEB. Without access to SWIFT, a Belgian messaging system that connects over 11,000 financial institutions worldwide, Russian banks, and by proxy, the Russian economy, is likely to endure severe losses. For example, Iran lost 30% of its foreign trade after being banned from SWIFT in 2012. VTB stock price | Source: Yahoo Finance …
Blockchain / March 2, 2022
Proactive sanctions can help spare the ecosystem: Chainalysis exec
As many countries, entities and even individuals face international sanctions, the crypto industry seeks to find its place among increasing regulations. Digital currencies have often been mentioned as an avenue for those subject to sanctions to divert them, such as in the recent case of Russia. In such instances, exchanges and other industry players need to understand where they stand compliance-wise. Research out of Harvard even suggested that central banks can use Bitcoin (BTC) to fight off sanctions. Speaking to Cointelegraph's managing editor Alex Cohen at the Israel Crypto Conference, Chainalysis head of sanctions Andrew Fierman said sanctions are nuanced …
Blockchain / Dec. 7, 2022