• Sa. Jun 19th, 2021

BitGo settles with US Treasury over ‚apparent‘ sanctions violations


Dez 30, 2020

The U.S. Treasury has settled with BitGo over charges that it facilitated users in sanctioned areas to transact using its crypto wallet services. 

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, said the Treasury’s Office of Foreign Asset Controls in a Dec. 30 announcement. 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. The settlement will cost BitGo $98,830. Given the hawkishness of OFAC’s programs, the settlement is relatively lenient, even though the actual value transacted was less than 10% of the fine. The civil penalty, had the case gone to court, would have been between $183,000 and $53 million.

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.“