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BitGo settles with US Treasury over sanctions violations

source-logo  theblock.co 31 December 2020 01:00, UTC

Crypto firm BitGo has settled with the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) for apparent violations of sanctions programs.

According to OFAC, BitGo failed to prevent persons located in sanctioned jurisdictions, such as Crimea, Cuba, Iran, Sudan, and Syria, to open accounts and use its services. The apparent violations occurred between 2015 and 2019, where BitGo processed 183 digital currency transactions, totaling nearly $9,130.

OFAC said BitGo had reason to know that some of its users were located in sanctioned countries based on those users' IP addresses but failed to implement controls at the time of the transactions. However, as BitGo did not voluntarily self-disclose the apparent violations, it will pay a fine. 

The company has agreed to pay $98,830 to settle its potential civil liability over violations. The maximum civil penalty for such cases is $53 million but OFAC said this case is "non-egregious," as BitGo cooperated with the investigation, took remedial measures, and hired a chief compliance officer.

The case highlights that crypto companies should take necessary steps to understand and mitigate the sanctions risks just like all financial service providers, said OFAC.