BitGo settles with U.S. Treasury over violations of the sanction program

BitGo, a U.S. based crypto firm that offers both custodial and non-custodial digital wallet management services has agreed with OFAC to remit $98,830 towards the settlement of a violation of the sanctions compliance program.

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) found that between 2015 and 2019, BitGo processed 183 digital currency transactions, totaling $9,127.79, on behalf of individuals who were located in sanctioned jurisdictions.

As part of a risk-based approach, OFAC encourages companies that provide digital currency services—like all financial service providers—should understand the sanctions risks and should take steps necessary to mitigate those risks such as sanctions list screening and IP blocking mechanisms.

At the time of the apparent violations, BitGo tracked its users’ IP addresses for security purposes. Bitgo, however, did not use this IP address information for sanctions compliance purposes. As a result, users located in Crimea, Cuba, Iran, Sudan, and Syria were able to use digital currency wallets on BitGo’s platform and engage in digital currency transactions.

The maximum penalty applicable in such matters is $53 Million. However, OFAC determined that since BitGo cooperated with OFAC’s investigation, implemented significant remedial measures such as IP address blocking, the appointment of a compliance officer, etc, the penalty amount, in this case, is set for $93 K. Bitgo has agreed to remit $98,830 to settle its potential civil liability over the violations.