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U.S. fines crypto exchange a record $24 million for breaking sanctions

A bitcoin logo is seen during the Bitcoin 2022 Conference at Miami Beach Convention Center on April 8 in Miami.  (Getty Images)
By David Yaffe-Bellany New York Times

Cryptocurrency exchange Bittrex was fined $24 million for breaking U.S. sanctions, the Treasury Department announced Tuesday, the largest penalty the government has imposed on a crypto business for violating sanctions.

Between 2014 and 2017, Bittrex allowed customers in Cuba, Iran, Sudan, Syria and the Crimea region of Ukraine to make virtual currency transactions worth more than $263 million, according to the Treasury Department. The company, which is based in Bellevue, Washington, was fined an additional $5 million for breaking rules designed to prevent money laundering and other financial crimes, the government said.

“Since inception, Bittrex has strived to comply with all government requirements diligently and in good faith,” the company said in a statement. The company is “pleased to have fully resolved this matter” with the government agencies, it said.

The penalty is part of an expanding effort by the Treasury Department and other agencies to crack down on crypto crime. In August, the department barred Americans from Tornado Cash, a crypto platform that criminals have used to launder billions of dollars in digital currency. U.S. investigators are also looking into possible sanctions violations by Kraken, another crypto exchange, the New York Times reported in July.

Without appropriate precautions, crypto firms “can become a vehicle for illicit actors that threaten U.S. national security,” Andrea Gacki, the director of the Treasury Department’s Office of Foreign Assets Control, said in a statement. “Virtual currency exchanges operating worldwide should understand both who – and where – their customers are.”

According to the Treasury Department, Bittrex employed as few as two employees, who had minimal anti-money-laundering training, to review all of its transactions for suspicious activity. The company’s lack of screening resulted in “significant exposure to illicit finance,” the government said, including 116,421 apparent sanctions violations.