BitGo to settle $93K with US Treasury over sanction violations. The U.S. Treasury has settled charges with BitGo that it enabled transactions between 2015 and 2019 for consumers in approved areas using its crypto wallet services.
In a Dec 30 announcement, the Treasury’s Office of Foreign Asset Controls saud that BitGo, an institutional crypto custodian service and wallet operator, did not do due diligence in blocking wallet users based in Crimea, Cuba, Iran, Sudan and Syria, OFAC said of BitGo “BitGo failed to exercise due caution or care for its sanctions compliance obligations when it failed to prevent persons apparently located in sanctioned jurisdictions to open accounts and send digital currencies via its platform as a result of a failure to implement appropriate, risk-based sanctions compliance controls.”
The Treasury wrote that there were 183 “apparent violations” of its various sanctions programs, adding up to just over $9,000 in transactions. They maintained the status of “apparent” as the accusations are based on the IP addresses from which users accessed BitGo hot wallets. In mitigating factors, the Treasury said that “BitGo screens all accounts, including “hot wallet” accounts, against OFAC’s Specially Designated Nationals and Blocked Persons List, including blocked cryptocurrency wallet addresses identified by OFAC.”
The settlement would cost $98,830 for BitGo. The settlement is reasonably lenient considering the hawkishness of OFAC’s programmes, even though the total amount transacted was less than 10 percent of the fine. The civil penalty would have been between $183,000 and $53 million, had the case gone to court.
But today’s action is certainly significant for other crypto companies. The announcement makes clear that OFAC will be looking more closely at crypto servicers “This action highlights that companies involved in providing digital currency services — like all financial service providers — should understand the sanctions risks associated with providing digital currency services and should take steps necessary to mitigate those risks.”
[image: Luke Michael]