Treasury’s financial crimes unit has imposed a $29.3 million civil money penalty (CMP) against virtual asset service provider Bittrex over what it described as “willful” Bank Secrecy Act (BSA) violations, with a good portion of that – about $24.3 million – credited back related to the firm’s settlement with the Office of Foreign Assets Control (OFAC) over sanctions violations, the agency said Tuesday.
The Financial Crimes Enforcement Unit (FinCEN) said Bittrex failed to maintain an effective anti-money laundering (AML) program from February 2014 through December 2018. “Bittrex’s program failed to appropriately address the risks associated with the products and services it offered, including anonymity-enhanced cryptocurrencies,” it said. Specifically, according to the Treasury unit:
- Bittrex failed to implement effective transaction monitoring on its trading platform, relying on as few as two employees with minimal AML training and experience to manually review all of the transactions for suspicious activity, which at times were over 20,000 per day.
- Bittrex conducted over 116,000 transactions valued at over $260 million with entities and individuals located in jurisdictions subject to comprehensive OFAC sanctions, including transactions with entities and individuals operating openly from OFAC-sanctioned jurisdictions such as Iran, Cuba, Sudan, Syria, and the Crimea region of Ukraine.
- Bittrex failed to file any SARs (suspicious activity reports) between February 2014 and May 2017. It also failed to file SARs on a significant number of transactions involving sanctioned jurisdictions, including the processing of over 200 transactions that involved $140,000 worth of virtual assets – nearly 100 times larger than the average withdrawal or deposit on the Bittrex platform – and 22 transactions involving over $1 million worth of virtual assets.