BitPay to pay $507,375 on crypto regulation breaches

OFAC’s US Treasury Department reported that Bitcoin payment provider BitPay has agreed to a $507,375 settlement of breaches of “multiple sanctions” relating to crypto transactions.

BitPay has allowed users from Ukraine, Cuba, North Korea, Iran, Sudan and Syria to trade with US traders using digital currency on its platform. OFAC has geographical sanctions in effect in these regions, and BitPay has reportedly facilitated “approximately $129,000 worth of digital currency transactions” with merchant customers in those regions.

According to OFAC, BitPay processed 2,102 transactions between 10 June 2013 and 16 September 2018, “on behalf of individuals who were located in the sanctioned jurisdictions on the basis of IP addresses” and “invoices.”

In addition, the notice indicated that the settlement sum represented that the breaches were not “voluntarily self-disclosed and non-egregious.”

OFAC stressed that its sanctions programs apply to all crypto entities and stated:

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

Last year, on 30 December, BitGo made a settlement with OFAC on charges of 183 violations for facilitating crypto transactions through its wallet services to users in approved areas between 2015 and 2019.

At the time, OFAC argued that the settlement with BitGo underscored that crypto-focused businesses should understand the sanctions-risks that come with the provision of crypto services. OFAC was of the opinion that the case also reflected the fact that those institutions had to take the appropriate measures to minimise such risks.