Crypto firm BitPay fined for violating US sanctions

BitPay will have to pay more than $500,000 to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) for providing crypto services to sanctioned regions.

In a Feb. 18 settlement announcement, OFAC said 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, and that OFAC had imposed a robust set of geographic sanctions.

OFAC once again reiterated that cryptocurrency companies need to comply with sanctions programs, stating:

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

The 2,102 transactions cited by OFAC reportedly took place between 2013 and 2018, during which time OFAC said BitPay, which facilitates crypto transactions between customers and merchants, only screened merchants.

Despite adding customer IP address information in 2017, OFAC said BitPay did not analyze the information to identify users in sanctioned locations until much later.

OFAC reached a similar settlement with BitGo in late 2020. While neither company was slapped with a huge fine, OFAC, which oversees all U.S. sanctions, is clearly sending a message to the crypto space.

While many sanctioned jurisdictions have expressed interest in using cryptocurrencies to circumvent them, projects such as Venezuela’s Petro token have yet to catch on.