Bittrex fined $24 million for violating US sanctions

The US treasury has finned Bittrex exchange $24 million for violating sanctions issued by the United States against individuals in different countries around the world. According to the US treasury, Bittrex did not stop sanctioned individuals from Cuba, Crimea, Iran, Syria, and Sudan from using the exchange.

The US Treasury fine against Bittrex is one of the biggest fines that has been issued against any entity especially for contravening sanctions.

Where it all started

1,730 individuals that fell under the list of sanctioned individuals by the Office of Foreign Assets Control (OFAC) were found to have used Bittrex between March 2014 and December 2017. It is reported that these individuals conducted about 116,421 transactions involving digital assets worth about $263.4 million.

It is important to note that Bittrex operated without a sanctions compliance program until December 2015, after which customer identity verification was enacted, followed by the retainment of a third-party vendor for the sanction screening process.

But even after putting in place measures to screen sanctioned individuals, Bittrex still lacked in its efforts leading to the issuance of a subpoena against it by the OFAC. The subpoena drove Bittrex to put in place multiple measures in a bid to curtail the number of violations.

The Treasury Department has noted this by saying:

“Bittrex subsequently implemented a number of other remedial measures, including implementing new sanctions screening and blockchain tracing software, conducting additional sanctions compliance training, and hiring additional compliance staff. Once implemented, these remedial measures substantially curtailed the number of Apparent Violations.”

The $24 million fine

To settle the fines of the aforementioned violations, specifically for allowing sanctioned individuals to transact with the exchange, Bittrex agreed to remit about $24.2 million.

It is however not the first time that the US Treasury has penalized a crypto exchange for violating sanctions. In February 2021, BitPay was fined $507,000 and BitGo was fined $98,000 for sanctions violations.