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Enforcement Release: December 30, 2020
OFAC Enters Into $98,830 Settlement with BitGo, Inc. for Apparent Violations of Multiple Sanctions Programs Related to Digital Currency Transactions
BitGo, Inc. (“BitGo”), a technology company based in Palo Alto, California, that implements security and scalability platforms for digital assets and offers non-custodial secure digital wallet management services, has agreed to remit $98,830 to settle its potential civil liability for 183 apparent violations of multiple sanctions programs (the “Apparent Violations”). As a result of deficiencies related to BitGo’s sanctions compliance procedures, BitGo failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria from using its non-custodial secure digital wallet management service. BitGo had reason to know that these users were located in sanctioned jurisdictions based on Internet Protocol (IP) address data associated with devices used to log in to the BitGo platform. At the...
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1) The BitGo, Inc. enforcement release is the first enforcement action to relate in any way to cryptocurrency. See e.g., FAQ # 559, FAQ # 560 and Letter From B. McGuire (Treasury) to Rep. E. Cleaver re: Cryptocurrencies (2019), for OFAC warnings/explanations that U.S. person compliance obligations the same, regardless of whether a transaction is denominated in digital currency or traditional fiat currency.
In this case, BitGo offered access to accounts and transaction processing services in a way that OFAC considered to constitute the exportation of services to the sanctioned destinations at issue. The prohibitions on the exportation of services to embargoed destinations applies when the person receiving the service is “in” or “ordinarily resident in” the sanctioned destination at issue. OFAC’s practice has been to consider the accessing of a U.S. person-operated site from a sanctioned country...