BitGo talks with the US Treasury Department on sanctions violations in Iran, Syria and Cuba. Authorities note that the company has made it easier for users in sanctioned areas to transact using cryptocurrency wallet services from 2015 to 2019.
BitGo has a problem
BitGo, a cryptocurrency keeper and digital asset wallet operator, failed to perform due diligence in blocking cryptocurrency wallet users who lived in Crimea, Cuba, Iran, Sudan and Syria, the Treasury Ministry announced in a December 30 announcement:
“BitGo did not exercise due care or uphold its sanctions compliance obligations when it did not prevent persons in sanctioned jurisdictions from opening accounts and sending digital currencies through its platform as a result of failure to implement appropriate sanctions.”
The Ministry of the Treasury wrote that there had been 183 “Apparent infringements” various sanctioning programs for a combined total of more than $ 9,000 in transactions concluded in this way. However, it added that the complaints were based on the IP addresses from which users accessed BitGo hot wallets. This means that some of these people could, for example, be in the US but use a VPN.
As a result, BitGo will pay a $ 98,830 penalty. The settlement is therefore relatively mild, even though the actual value of the transaction was less than 10%. fine. If the case went to court, the civil penalty would be between $ 183,000 and $ 53 million.
The case is important for the market
The decision of the authorities is certainly important for other companies on the market. The announcement made it clear that officials will be taking a closer look at cryptocurrency service providers:
“This action underlines that companies involved in the provision of digital currency services – like all financial service providers – should understand the sanction risk associated with the provision of digital currency services and should take the necessary steps to mitigate this risk.”
US regulators also expect companies that support digital currencies to have smooth KYC procedures.
A number of U.S. sanctioned countries have expressed interest in using cryptocurrencies to circumvent them. Venezuela’s Nicolas Maduro regime is famous for its interest in Bitcoin, although his own national token – Petro – has not been successful.