The calls for many nations’ Financial Regulatory bodies to regulate cryptocurrency activities in their respective nations have been on a high, especially from many crypto analysts. The various regulations expected to be meted out are supposed to drive the growth of the cryptocurrency market in their respective terrain.
However, many crypto servicing firms like exchange are expected to facilitate the regulations that these financial regulatory bodies will put in place. Unfortunately for BitPay, a crypto wallet service firm, it has now found itself in the news for the wrong reason after violating the United States Government’s orders.
BitPay was fined for servicing countries under sanction
The Bitcoin payment facilitating firm was found guilty of providing payment facilitation services for countries like Iran, Syria, North Korea, and Cuba, all of which were under sanctions by the U.S Government due to unknown issues. The United States Treasury’s Office of Foreign Assets Control (OFAC), bounded by the court ruling, will now collect more than $500,000 from the crypto payment giant for the offense it committed between 2012 and 2018.
In the court’s official report, BitPay had sanctioned more than 2,000 financial transactions to the banned countries, disobeying the U.S Government regulations. The reason behind this horrendous act by the U.S based Crypto payment company is yet to be unknown, but many believe that the nature of their business might be responsible for this. The business of BitPay, which is helping customers exchange cryptocurrency into local money, may have been responsible for their actions, as citizens of the restricted countries might have used fake identification to smother the transactions.
Crypto exchanges and service firms must do better
The fine being levied upon BitPay is reportedly higher than the value of the gross amount of transaction fee of about $129,000 illegally transacted, which represents a loss for the crypto payment firm. However, Jan Jahosky, one of the firm’s spokespersons, confirmed that BitPay had fully complied with the U.S OFAC and is pleased to have resolved everything now.
In OFAC’s statement, they had slandered BitPay for treating transactions of countries whose IP addresses have been banned by the nation’s government, sighting that it had to lower the $600 million fine on BitPay to $500,000 due to the company’s new participation in training its staff to comply with the financial regulatory body.
BitPay had deservedly got lucky that the $600 million fine was not enacted, as it would hamper the firm’s growth and fortune. However, this is a wake-up call to other crypto exchanges and blockchain firms currently operating against their nation’s financial regulators’ directives. Crypto regulations are generally believed to change the market’s image, subject to several criticisms due to the past lack of regulations. However, crypto service firms must now do better to ensure that the regulations in place are effective.