top of page

Bittrex is fined $29 million for failing to comply with AML and SAR reporting requirements

Virtual currency exchange  Bittrex was given a $29M (€29.8M) fine for failing to comply with "multiple" sanctions responsibilities as well as "willful violations" of the AML and SAR reporting requirements of the Bank Secrecy Act.

The Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) of the US Treasury revealed that they had imposed fines on the currency exchange totalling more than $24 million (€24.7 million) and $29 million (€29.8 million), respectively.

The settlement constitutes the first simultaneous enforcement action initiated by OFAC and FinCEN in this area and is the largest enforcement action taken to date by OFAC against a virtual currency operator.

The Treasury issued the following statement: "Investigations by OFAC and FinCEN found apparent violations of multiple sanctions programmes and willful violations of the Bank Secrecy Act’s (BSA’s) anti-money laundering (AML) and suspicious activity report (SAR) reporting requirements."

The virtual currency sector is reminded by these enforcement actions of the value of putting in place suitable risk-based sanctions compliance measures and abiding by BSA requirements. ," according to FinCEN.

In order to resolve its possible civil responsibility for 116,421 alleged breaches of many sanctions programs, Bittrex has agreed to pay OFAC $24,280,829.20.

Between March 2014 and December 2017, Bittrex was unable to stop users from utilizing its platform to conduct transactions of almost $263,451,600.13 in virtual money, according to reports from the Crimea, Cuba, Iran, Sudan, and Syria.

The currency exchange also consented to forfeit $29,280,829.20 for its "willful violations" of the AML program and SAR obligations under the Bank Secrecy Act.

FinCEN will, nonetheless, credit the $24,280,829.20 payment as part of its agreement to resolve its obligation to OFAC. As a result, the cryptocurrency exchange will be required to pay the Treasury £29,280,829.20.

By "deploying inadequate and ineffective transaction monitoring on its platform," Bittrex, according to FinCEN, failed to maintain a "effective AML programme," which led to "significant exposure to illicit finance."

Additionally, Bittrex's AML program neglected to "appropriately address" the risks connected to the goods and services it provided, particularly cryptocurrencies with increased anonymity, and failed to submit any SARs between February 2014 and May 2017.

Additionally, FinCEN discovered that Bittrex neglected to submit SARs for a "significant number of transactions" involving sanctioned jurisdictions, including transactions that were "suspicious above and beyond the fact that they involved a sanctioned jurisdiction."

In a statement, Andrea Gacki, director of OFAC, said: "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 US national security."

"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 failures to implement appropriate controls leads to sanctions violations," she continued.



bottom of page