April 5, 2023

California money services business settles apparent sanctions violations with OFAC

On March 31, 2023, the Office of Foreign Assets Control of the US Department of the Treasury announced a settlement with Uphold HQ Inc., a money services business based in Larkspur, California.  Uphold operates a digital trading platform, enabling customers to move, convert and hold both traditional and virtual currencies, conduct foreign exchange transactions, and send and receive cross-border remittances.

According to OFAC, between March 2017 and May 2022, Uphold processed 152 transactions in apparent violation of Iran, Cuba, and Venezuela sanctions.  The transactions and their values were:

  • 53 transactions for customers who self-identified as being located in Iran, valued at $22,870.02;
  • 25 transactions for customers who self-identified as being located in Cuba, valued at $142,683.74;
  • 16 transactions with an Iranian virtual currency exchange, totaling $13,705.50, and;
  • 58 transactions on behalf of customers who self-identified as employees of Venezuela’s state-owned oil and natural gas company, valued at $1,316.54.


Although Uphold performed sanctions screening on much of the information provided by its customers, other information – such as identification documentation from a sanctioned jurisdiction, or a free-text address field in which customers input addresses in sanctioned jurisdictions – was not screened, resulting in apparent violations of the Iranian Transactions and Sanctions Regulations, 31 CFR §§ 560.204, 560.206, and 560.215, the Cuban Assets Control Regulations, 31 CFR § 515.201, Executive Order 13884, and the Venezuela Sanctions Regulations, 31 CFR § 591.201.

OFAC deemed as aggravating factors the company’s failure to exercise due caution when it onboarded customers, and its lack of adequate screening and compliance processes.  At the same time, OFAC viewed as mitigating factors Uphold’s penalty-free record in the five years preceding the apparent violations, its cooperation with OFAC in the investigation, and the remedial measures taken by the company since the start of the investigation.  These measures include the suspension of account access to users in sanctioned jurisdictions, automatic restrictions on funds transfers to sanctioned jurisdictions, implementation of more comprehensive screening programs, regular testing and quality assurance, real-time virtual currency wallet address screening, additional resources for the compliance department, and enhanced training for the company’s employees.

Uphold has agreed to pay $72,230.32 to settle its potential civil liability for the apparent violations.

US Dept of the Treasury press release | Enforcement release