Bitcoin payment processor Bitpay on regulation pressure with U.S treasury
One of the biggest cryptocurrency payment processors "BitPay", will pay $507,375 to settle its likely civic obligation for possible breaches of U.S. embargoes on countries like Cuba, North Korea and Iran, the U.S. Treasury Department announced.
Cryptocurrency is mostly unregulated, decentralized and anonymous, have gained popularity in recent years, especially in countries under U.S. and other sanctions, where they are seen as a way of getting around the global financial system.
Bitcoin reached a market capitalization of $1 trillion as it hit yet another record high on Friday, with the worldâ€™s most popular cryptocurrency hitting an all-time high above $54,000. It has climbed roughly 64% so far this month only, fueled by hints that it is gaining acceptance among investors and companies.
The U.S. Treasuryâ€™s Office of Foreign Assets Control (OFAC) said late on Thursday that it had detected 2,102 instances between 2013 and 2018 in which BitPay had allowed people located in sanctioned countries to conduct transactions worth around $129,000 in total with merchants in the United States and elsewhere.
OFAC acknowledged that BitPay had implemented sanctions compliance controls as early as 2013 but it should have better screened the information it had on customersâ€™ location through Internet Protocol (IP) addresses and other data it had access to.
BitPay said it had continued to improve its compliance program during the transaction period and since.
The illegal use of cryptocurrencies has long worried regulators and law enforcement, with U.S. Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde both calling for stronger overlook last month.
Increasing regulation is a blow people in countries like Cuba, cut off from conventional international payment systems and financial markets by the decades-old U.S. trade embargo, although traders say they will find a way around it.
While digital currencies are often thought of as a form of investment, in Cuba some ordinary citizens buy them to make purchases online as well as to receive remittances.