Another crypto firm hit with fines for violating U.S. sanctions

BitPay apparently screened merchants but not customers.

BitPay will have to pay the U.S. Treasury’s Office of Foreign Asset Control over half a million dollars for crypto services to sanctioned regions. 

In a Feb. 18 announcement of the settlement, OFAC said that BitPay had facilitated “approximately $129,000 worth of digital currency-related transactions with BitPay’s merchant customers” by users from Crimea, Cuba, North Korea, Iran, Sudan and Syria — effectively the full range of geographical sanctions that OFAC has in place. 

OFAC repeated that crypto firms need to align themselves with sanctions programs, saying: 

“This action emphasizes that OFAC obligations apply to all U.S. persons, including those involved in providing digital currency services.”

The 2,102 transactions that OFAC cites reportedly occurred between 2013 and 2018, during which time the office says that BitPay, which provides crypto-enabled transactions between customers and merchants, screened only merchants.

Despite adding IP address info about customers in 2017, OFAC says that BitPay did not analyze that information to identify users in sanctioned locations until much later.

OFAC reached a similar settlement with BitGo at the end of 2020. While neither featured crippling fines, the office, which oversees all U.S. sanctions, is clearly sending a message to the crypto world. 

While a number of sanctioned jurisdictions have expressed interest in using crypto to evade them, projects like Venezuela’s Petro token have not caught on.