OFAC Risk Isn't Virtual in the US for Digital Currency Payment Processors (February 2021)
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Introduction
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On February 18, 2021, the US Department of the Treasury's Office of Foreign Assets Control announced a settlement of apparent US sanctions violations by Atlanta, Georgia-based BitPay, Inc. involving its provision of digital currency payment processing services to purchasers of goods and services located in Crimea, Cuba, Iran, North Korea, Sudan and Syria.
The case highlights the sanctions risks for US companies that provide services in connection with digital currency payments and indicates sanctions compliance controls that may be appropriate to mitigate such risks. BitPay did not voluntarily self-disclose the apparent violations, but OFAC determined that they were not egregious and therefore assessed a base penalty of $2,255,000. OFAC then reduced the final penalty to $507,375 based on a number of mitigating factors including BitPay's cooperation with OFAC, remedial measures and compliance enhancements.
