Regulations and sanctions are what uphold the law in all sectors of the major countries across the world. Even though the crypto sector looks like a sector that would naturally aid in breaking the law, regulators have been able to have their leash on firms across the sector. In a recent case involving the regulator and crypto exchange, the exchange has been sanctioned to violate a regulation. According to the latest news, the crypto exchange involved, Bitpay, had agreed to settle with the US Treasury Department after it was charged with breaking the law when it carried out 2,000 transactions on its platform.
The crypto exchange facilitated trades to users in sanctioned countries
The update from the case was that the crypto exchange platform aided the transaction of individuals that are said to be from a sanctioned region into carrying out transactions with United States residences. The regulator claimed that the crypto exchange broke the sanctions law after it processed transactions from North Korea, Iran, Syria, the Crimea region in Ukraine, and some others. As a result, Bitpay would have to pay more than $500,000 in fines, according to the law.
In transactions that spanned through 2013 and 2018, the regulator claimed that the crypto exchange allowed nothing less than $129,000 worth of digital assets to be transferred between users in the aforementioned countries and the United States of America citizens. OFAC claimed that the exchange was very aware that it was offering services to the countries because they track their users using their IP addresses.
Even though Bitpay would have had to pay through their noses in a fine worth up to $600 million, the OFAC claimed that they considered some key factors. The factors include the recent compliance control measures, the staff training, and launching a service to detect users’ identities, amongst others.
OFAC announces a published regulation framework for exchanges
OFAC also claimed that the crypto exchange had blocked access of the countries mentioned above from ever coming on to their platform. Bitpay was also transparent in their dealings as they gave the regulators little or no worry while they carried out their investigations. “Bitpay breached the rule after it failed to monitor its sanctions complained obligation. It allowed people from a jurisdiction sanctioned to enter its platform and make transactions with American citizens.
Bitpay also allowed this to continue for close to five years even though it got sufficient information to examine the clienteles location and do the needful”, the OFAC notice read. OFAC further advises crypto exchanges to learn from the ordeal of Bitpay and abide by all the rules and regulations in the country.
In line with this, the regulator has announced that it has a published framework that would guard the companies against going against all the rules and regulations. According to a Bitpay spokesperson, he pointed out that when the authorities came, they had no choice but to cooperate with them, and they are happy that they have resolved the matter amicably.