December 30, 2020

OFAC settles with digital currency service provider

The Office of Foreign Assets Control of the US Department of the Treasury has resolved the potential civil liability of BitGo, Inc. for 183 apparent violations of several sanctions programs.  BitGo, a California-based technology company that provides services in the digital marketplace, has agreed to pay $98,830 to settle its potential civil liability.

According to OFAC, deficiencies in BitGo’s sanctions compliance procedures resulted in the company’s allowing persons apparently located in the Crimea, Cuba, Iran, Sudan and Syria to use BitGo’s non-custodial secure digital wallet management services between March 2015 and December 2019, in apparent violation of Executive Order 13685, the Cuban Assets Control Regulations, the Iranian Transactions and Sanctions Regulations, and the Syrian Sanctions Regulations. 

In assessing the monetary penalty, OFAC determined that BitGo did not voluntarily self-disclose the apparent violations.  OFAC viewed as aggravating factors the company’s failure to exercise due caution in fulfilling its sanctions obligations; moreover, during the relevant period, BitGHo tracked its users’ IP addresses, and yet did not use the information for purposes of sanctions compliance.  OFAC deemed the company’s small size and clean record, its cooperation with OFAC’s investigation, and subsequent remedial measures as mitigating factors, and allowed a reduction to $93,830, about half of the base civil monetary penalty.

In its release to the public about this enforcement action, OFAC emphasized that sanctions obligations apply to all US persons, and companies involved in providing digital currency services must understand the sanctions risks associated with such services, and take measures to mitigate those risks.

OFAC enforcement release