US Treasury Department fines crypto company again

Crypto payment service provider BitPay also violates applicable sanctions

The US economic sanctions compliance office has imposed a penalty of more than half a million US dollars on crypto company BitPay.

According to a related settlement dated 18 February, the Office of Foreign Asset Control (OAFC), an agency of the US Treasury Department, has penalised the Bitcoin Machine crypto payment service provider for „transferring nearly $129,000 in digital currency“. The payments in question to online merchants originated from regions such as Cuba, North Korea, Iran, Sudan, Syria and Crimea, all of which are subject to OAFC sanctions.

In this context, the authority emphasises that crypto companies must also comply with existing sanctions:

„This penalty strongly demonstrates that OFAC’s guidance applies to all American citizens, including those that provide digital currency services.“

From 2013 to 2018, 2,102 transactions were reportedly processed through BitPay in violation of applicable sanctions. The crypto payment service provider is said to have only verified merchants when transacting between customers and buyers.

Although the penalties in both cases are not unduly

Although BitPay has also been collecting customers‘ IP addresses since 2017, this information was not evaluated in time to prevent the illegal transactions, according to OFAC.

OFAC had already reached a similar settlement with crypto company BitGo in late 2020. Although the penalties in both cases are not unduly damaging to business, the authority is sending a clear signal to the entire crypto industry.

More and more countries affected by sanctions are considering using cryptocurrencies to get around them. A plan that is not free of obstacles; for example, the Petro, Venezuela’s crypto project, has not yet really been able to establish itself.