Clifford Chance

OFAC Settlement Underlines Sanctions Risks for Digital Currency Services Providers

January 4, 2021

On December 30, 2020, the US Department of the Treasury's Office of Foreign Assets Control announced a settlement of apparent US sanctions violations by California-based BitGo, Inc. that involved its provision of non-custodial digital wallet management services for digital currency private keys to customers in Crimea, Cuba, Iran, Sudan and Syria. The case highlights the sanctions risks for US companies that provide services in connection with digital assets and indicates sanctions compliance controls that may be appropriate to mitigate such risks. BitGo did not voluntarily self-disclose the apparent violations, but OFAC determined that they were not egregious and therefore assessed a base penalty of $183,000. OFAC then reduced the final penalty to $93,830 based on a number of mitigating factors including BitGo's cooperation with OFAC, remedial measures and compliance enhancements.

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