Cubans have turned to bitcoin to make purchases abroad.
The Treasury’s Office of Foreign Assets Control fined Bitcoins payment provider BitPay for violations of “multiple penalties” related to crypto transactions.
The penalty was set at $ 507,375 for facilitating the processing of payments in bitcoin to Cubans residing on the island.
This penalty is also applied for allowing users from Ukraine, Cuba, North Korea, Iran, Sudan and Syria to carry out transactions with merchants in the US, using digital currency on their platform.
BitPay apparently facilitated “approximately $ 129,000 worth of digital currency related transactions” with business clients from the aforementioned regions.
This is OFAC’s first Cuba-related sanction since Joe Biden assumed the presidency on January 20.
According to OFAC, BitPay processed 2,102 transactions between June 10, 2013 and September 16, 2018, “on behalf of individuals who, based on IP addresses” and “invoices,” were in sanctioned jurisdictions.
Furthermore, the notice stated that the settlement amount reflected that the violations were not “willfully self-disclosed and were not egregious.”
“This action emphasizes that OFAC’s obligations apply to all American persons, including those involved in the provision of digital currency services,” explained OFAC.
Since its inception in 2011, BitPay has been listed as one of the most reputable and long-standing crypto payment processors in the digital currency ecosystem.
Its main line of business is based on allowing businesses to receive payments with cryptocurrencies without them having contact with said assets, so they will end up receiving the equivalent in fiat money without exposing themselves to market volatility.
As a precedent to this measure, last December the Donald Trump administration imposed sanctions on US companies for favoring trade with Cuba, also linked to cryptocurrency transfers.
In that case, the Treasury Department fined the technology company BitGo, from Palo Alto, California, which offered the digital wallet service to people located in Cuba.
A month earlier, OFAC forced the Western Union company to close its operations on the island after 21 years of service, delivering remittances to Cubans.