Defunct Crypto Exchange ShapeShift Resolves Sanctions Violations for $750K

ShapeShift, a now-defunct cryptocurrency exchange, has agreed to pay $750,000 to settle claims that it violated U.S. sanctions. According to the U.S. Treasury Department, ShapeShift failed to implement adequate controls to prevent individuals located in sanctioned countries from using its platform. The Treasury Department’s Office of Foreign Assets Control alleges that ShapeShift facilitated transactions for individuals and entities in countries such as Iran, North Korea, Syria, Ukraine, and Crimea. The Treasury Department asserts that ShapeShift did not implement an effective sanctions compliance program, allowing sanctioned individuals to conduct transactions through its platform. The settlement includes ShapeShift acknowledging responsibility for the alleged violations, as well as agreeing to cooperate with the Treasury Department in future investigations. The resolution underscores the seriousness with which the U.S. government is pursuing enforcement of sanctions against cryptocurrency exchanges that fail to adhere to anti-money laundering and counter-terrorism financing rules. This event highlights the importance of cryptocurrency firms implementing robust compliance programs to avoid potential penalties.