Bittrex, Inc., fined $5M for BSA Act violations
FinCEN has issued a consent order to Bittrex, Inc., a private company the provides an online virtual currency exchange and hosted wallet services, ordering the company to pay a civil money penalty of $29,280,829.20 for vilations of the Bank Secrecy Act and FinCEN's implementing regulations. FinCEN's action is part of a global settlement with OFAC. FinCEN is crediting Bittrex's payment of $24,280,829.20 to OFAC toward the fine due FinCEN, for a net due to FinCEN of $5 million.
FinCEN’s investigation found that, from February 2014 through December 2018, Bittrex failed to maintain an effective AML program. Bittrex’s program failed to appropriately address the risks associated with the products and services it offered, including anonymity-enhanced cryptocurrencies.
Bittrex failed to implement effective transaction monitoring on its trading platform, relying on as few as two employees with minimal anti-money laundering training and experience to manually review all of the transactions for suspicious activity, which at times were over 20,000 per day.
Bittrex conducted over 116,000 transactions valued at over $260 million with entities and individuals located in jurisdictions subject to comprehensive OFAC sanctions, including transactions with entities and individuals operating openly from OFAC-sanctioned jurisdictions such as Iran, Cuba, Sudan, Syria, and the Crimea region of Ukraine.
Bittrex failed to file any SARs between February 2014 and May 2017, a period of over three years. The company also failed to file SARs on a significant number of transactions involving sanctioned jurisdictions, including the processing of over 200 transactions that involved $140,000 worth of virtual assets—nearly 100 times larger than the average withdrawal or deposit on the Bittrex platform—and 22 transactions involving over $1 million worth of virtual assets.