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Enforcement Release: October 11, 2022
OFAC Settles with Bittrex, Inc. for $24,280,829.20 Related to Apparent Violations of Multiple Sanctions Programs
Bittrex, Inc. (“Bittrex”), a private company based in Bellevue, Washington, that provides an online virtual currency exchange and hosted wallet services, has agreed to remit $24,280,829.20 to settle its potential civil liability for 116,421 apparent violations of multiple sanctions programs. As a result of deficiencies related to Bittrex’s sanctions compliance procedures, Bittrex failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria from using its platform to engage in approximately $263,451,600.13 worth of virtual currency-related transactions. The applicable sanctions programs generally prohibited U.S. persons from engaging in transactions with these jurisdictions. Based on internet protocol (“IP”) address information and physical address information collected about each customer at onboarding, Bittrex had reason to know that these users were in jurisdictions...
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1) This is the largest payable fine that OFAC has issued since the UniCredit Bank AG case (owed to the high number of transactions processed), but otherwise it does not break new ground as the basis for liability and compliance considerations discussed are very similar to the other cryptocurrency-related enforcement actions, i.e. BitGo, Inc. and BitPay, Inc. Compare also Civil Enforcement Information - Tango Card, Inc., issued just before this action, dealing with internet services provided to presumptively persons "ordinarily resident" in embargoed destinations in light of their IP addresses.
2) Note the reference to "blockchain tracing software to assist in identifying and blocking virtual currency addresses associated with persons potentially identified on OFAC’s SDN List". This appears to be the first statement that OFAC has...