• Thu. Oct 5th, 2023

A Heavy Settlement Penalty of $500k Incurred on BitPay for Crypto Payment Violations

Hassan Mehmood

ByHassan Mehmood

Feb 21, 2021

BitPay is a crypto payment system that helps users to convert their cryptocurrency into Fiat money and the other way around. It has been working quite elegantly in various regions of the world until the U.S. Treasury’s Office of Foreign Assets Control (OFAC) found the platform in violation of about 2102 violations regarding the sanctions program. That is quite a heavy number of violations, and the settlement fine incurred on the payment provider is as massive as the number of violations.

OFAC’s Action against Bitpay

An enforcement notice came forth on 18th February, which states that BitPay is to pay almost $507,375 in terms of settlement for the concerning number of violations found. The firm allowed various persons from Iran, North Korea, Sudan and Ukraine to make merchant based payments to the merchants who live in the U.S. and other parts of the world. The company would have to pay for the violations it committed.

What does BitPay offer as a service and its response to this enforcement notice?

BitPay allows the merchants to accept payments in Bitcoin and other various cryptocurrencies. The firm’s main task is to arrange for dedicated paperwork and initiate transactions when goods are either bought or purchased with cryptocurrency. In simpler words, it acts as a facilitator making the process of getting paid in cryptocurrency easier for the merchants. After the transactions occur conveniently, BitPay would convert the Bitcoin or cryptocurrency payment into the Fiat money for these merchants.

The main point that contradicts BitPay’s customer agreement related to their broadcasting data is what got violated in this whole crusade. OFAC has objected that BitPay facilitated these transactions despite knowing all about the customers’ broadcasting data, such as their I.P. addresses, current location. 

It also allowed people from sanctioned jurisdictions to carry out the transaction that was intended for the purchase of goods from merchants in the U.S. or other parts of the world. The enforcement notice only came after the announcement made by BitPay that it will now support Apple Pay and is likely to explore Google Pay at some point in the future.  

Hassan Mehmood

Hassan Mehmood

Hassan Mehmood, a valued writer at Big Trends Signals, uses his profound online trading expertise to produce in-depth guides and unbiased reviews, enabling traders to navigate digital marketplaces efficiently.

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