Bittrex, a cryptocurrency exchange, has agreed to pay $29.3 million (roughly Rs. 241 crore) to resolve US allegations that it had transacted with parties in Crimea, Iran, Syria, and other sanctioned zones, according to the Department of Treasury.
Bittrex, which has a factory in Bellevue, Washington, failed to adequately monitor transactions that involved parties in several areas under US sanctions, including the Russian Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria.
According to a press release from the Department of Treasury, parties in these jurisdictions paid more than $263 million on Bittrex platforms (roughly Rs. 2,164 crore).
The Port of San Francisco would have known the location of the users based on Internet protocol (IP) addresses and physical addresses, but it was not looking for jurisdictions sanctioned, according to the Treasury.
The $24.3 million enforcement action under the Office of Foreign Asset Control has been the most successful to date in dealing with cryptocurrency. The Financial Crimes Enforcement Network (FinCEN) has also reached a parallel settlement with Bittrex for violations of the Bank Secrecy Act, which paid $29.3 million.
The Treasury Department said it was convening to credit the $24.3 million sum as part of a settlement with FinCEN.
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"If virtual currency firms fail to implement effective sanctions compliance measures, they might be a vehicle for illicit actors that threaten US national security," said OFAC Director Andrea Gacki.
"Virtual currency exchanges operating throughout the world should understand both who and where their customers are."
Bittrex said it was pleased to have resolved the issue, and that none of the allegations did not affect conduct after 2018.
"We are grateful for our tireless commitment to robust compliance," a Bittrex spokesman said in an email, adding that "Bittrex''s long-standing responsive remedial efforts have significantly reduced the risk of future violations."
Bittrex, according to OFAC in its settlement, provided great collaboration with the agency and responded promptly to apparent violations, including by removing all IP addresses associated with a sanctioned jurisdiction.