Briefly
- Shuttered crypto alternate ShapeShift pays $750,000 to settle alleged sanctions violations from the U.S. Treasury Division.
- The Treasury Division alleges that the alternate allowed customers from sanctioned international locations like Cuba to make transactions.
- ShapeShift, based by crypto O.G. Erik Voorhees, closed down in 2021.
Defunct crypto alternate ShapeShift has agreed to pay $750,000 to settle violations of the Workplace of International Property Management, the U.S. Division of the Treasury mentioned Tuesday.
The federal government division mentioned that the alternate—based by early crypto entrepreneur Erik Voorhees—took cash from customers based mostly in sanctioned international locations Cuba, Iran, Sudan, and Syria.
Feds alleged that ShapeShift had “no sanctions compliance program in place to display screen customers or transactions for a nexus to sanctioned jurisdictions,” and processed over $12.5 million in crypto transactions by customers from sanctioned international locations between December 2016 and October 2018.
“Solely after ShapeShift obtained an administrative subpoena from OFAC did it undertake a sanctions compliance program,” the Treasury Division’s announcement learn.
“ShapeShift had cause to know that such customers have been situated in sanctioned jurisdictions, together with on the premise of IP handle knowledge,” the Treasury Division continued, including that the alternate “conveyed financial profit to individuals in a number of jurisdictions topic to OFAC sanctions and thereby harmed the integrity of a number of OFAC sanctions applications.”
It mentioned that the tremendous was small as ShapeShift is a shuttered alternate with restricted property. ShapeShift closed in 2021.
The alternate—based in 2014, integrated in Switzerland, and run out of Denver, Colorado earlier than it shut down—allowed customers to swap digital cash and tokens with out having to enroll with typical know-your-customer or KYC particulars, comparable to addresses or financial institution particulars. Shoppers may due to this fact commerce cryptocurrencies like Bitcoin and Ethereum with a level of anonymity.
ShapeShift obtained early funding from early crypto bigwigs like Roger “Bitcoin Jesus” Ver and Digital Foreign money Group CEO Barry Silbert.
However the alternate bumped into hassle when the Securities and Change Fee began investigating the platform for not registering as a dealer or alternate.
ShapeShift final yr agreed to a cease-and-desist order and a $275,000 tremendous to settle allegations from the SEC.
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