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On October 11, 2022, the U.S. Department of Treasury announced that its Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) announced settlements for over $25 million and $29 million, respectively, against Bittrex, a cryptocurrency trading platform. The Bittrex action is the first parallel enforcement action by OFAC and FinCEN against a single cryptocurrency actor and OFAC’s largest cryptocurrency settlement to date.

Under the terms of the settlement with OFAC, Bittrex acknowledged that from 2014 to 2018, it allowed over 116,000 transactions -- valued at over $260 million -- with individuals or entities in OFAC-sanction jurisdictions such as Iran, Cuba, Sudan, Syria, and the Crimea region of Ukraine. Based on information collected by Bittrex during onboarding, such as IP addresses and physical addresses, Bittrex had reason to know that users located in sanctioned jurisdictions but lacked sanctions screening procedures to block such users from the platform.

According to the consent order with FinCEN, Bittrex failed to implement and maintain an effective anti-money laundering (“AML”) program as required by the Bank Secrecy Act (BSA) and failed to review suspicious transactions on its platform and file suspicious activity reports (SARs). The consent order states that Bittrex failed to file SARs from its founding until May of 2017, and then filed only one SAR between and May and November of 2017. Among the suspicious transactions it failed to detect were those by individuals in sanctioned jurisdictions, even though the transactions were hundreds of times larger than its typical customer transactions, and those transactions with online “darknet” marketplaces such as AlphaBay, Agora, and the Silk Road 2. The consent order further states that at one point in 2017 Bittrex had a daily average of 23,800 transactions with a value of approximately $97.9 million yet relied on only two employees to manually review all of its transactions for suspicious activity. Bittrex was notified of an IRS examination in October 2017 and at that point began making improvements to its AML program and filing SARs.


FinCEN acting Director Himamauli Das announced that "FinCEN will not hesitate to act when it identifies willful violations of the BSA." He continued to say that “Bittrex's failures created exposure to high-risk counterparties including sanctioned jurisdictions, darknet markets, and ransomware attackers. Virtual asset service providers are on notice that they must implement robust risk-based compliance programs and meet their BSA reporting requirements," Das said.

Similarly, OFAC Director Andrea Gacki warned that "when virtual currency firms fail to implement effective sanctions compliance controls, including screening customers located in sanctioned jurisdictions, they can become a vehicle for illicit actors that threaten U.S. national security."

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


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Jaimie L. Nawaday | Partner

Jaimie L. Nawaday is a partner in the Litigation Department and co-head of the Government Enforcement and Internal Investigations Practice Group. Prior to joining the Firm, Jaimie was chair of the White Collar, Investigations and Compliance practice group at another New York City law firm. Jaimie leverages years of public and private sector experience to provide strategic advice to companies and executives in sensitive government investigations and regulatory matters. She advises public and private companies, boards of directors, and senior executives in federal criminal and civil cases involving financial fraud, securities fraud, Foreign Corrupt Practices Act, campaign finance violations, the False Claims Act, asset forfeiture, and Bank Secrecy Act and AML issues. Jaimie also conducts internal investigations for companies and advises on crisis response and media relations, and appears on CNN, MSNBC, and other networks to explain and comment on developing issues in federal criminal law.

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Grace Dahlstrom | Law Clerk

Grace Dahlstrom is a Law Clerk in the Business Transactions Group.  Grace received a B.A., cum laude, from Scripps College and a J.D. from the University of California, Berkeley, School of Law.