BitPay — $507,375 OFAC Penalty (2021)

BitPay settled with OFAC for apparent sanctions violations across crypto payment processing.

What happened

BitPay was penalized by the Office of Foreign Assets Control (OFAC) in 2021. The case is instructive for any organization handling cross-border payments, crypto transactions, or customer onboarding where sanctioned parties may be present.

Violations cited

• Processing payments involving sanctioned jurisdictions
• Inadequate geolocation screening
• Insufficient sanctions risk assessment

Lessons for compliance teams

• IP geolocation on every transaction
• Screen all counterparty wallets
• Implement risk-based enhanced due diligence
• Regular sanctions compliance training

How this could have been prevented

In nearly every OFAC penalty case, the root cause is the same: inadequate or outdated sanctions screening. The sanctioned parties were on the SDN list at the time — they simply weren't caught. Real-time screening against the current SDN list, with proper name-matching and fuzzy logic, would have flagged most of these transactions before they completed.