The US GOV penalized the crypto payments company BitPay for providing services to sanctioned countries and the company has to a pay a fine to the US Treasury. The Office of Foreign Assets Control found that there was a sanction violation whereas BitPay facilitated 2,101 transactions from people in sanctioned countries so let’s find out more in our latest cryptocurrency news.
The BTC Payment processor BitPay agreed to pay the fine of $507,375 to the US Treasury Office of Foreign Assets Control for the violation of international sanctions, more specifically 2,102 of them. According to the OFAC’s notice, the agency found that BitPay which is an Atlanta-based crypto payments company for online merchants facilitated payments in countries under US Sanctions like North Korea, Cuba, Iran, Syria between 2013 and 2018.
The settlement is another reminder that although bitcoin’s network is decentralized and looks above the law, centralized crypto companies are subject to the law still. bitPay handles payments for merchants that want to sell goods and services for crypto so when the customers buy things in crypto, BitPay handles the paperwork to facilitate the transaction and then converts that money into fiat currencies by handing it over to the merchants. The company allowed people in sanctioned regions to transact over $129,000 as per the OFAC notice:
“We cooperated fully with the Office of Foreign Assets Control (OFAC) and are pleased to have resolved this matter.”
He said that this case involved a small number of transactions but the treasury agency said that the payments processor knew it was processing payments in sanctioned countries because the information was recorded:
“BitPay failed to exercise due caution or care for its sanctions compliance obligations when it allowed persons in sanctioned jurisdictions to transact with BitPay’s merchants using digital currency for approximately five years, even though BitPay had sufficient information to screen those customers.”
With the US GOV penalty having the chance to reach $620 million, BitPay settled by cooperating and trained the employees to screen customers which means they have been taking preventive steps. Crypto companies are on thin ice with US regulators as Paxful dropped out of Venezuela due to US sanctions. The US SEC slammed other companies for running unregistered ICOs ahead of their launch to the US investors. Another concern is the FinCEN proposal to force crypto companies to regulate transactions from private crypto wallets.
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