On October 11, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and Financial Crimes Enforcement Network (“FinCEN”) announced related enforcement settlements with Bittrex, Inc., a U.S.-based digital asset exchange and hosted wallet services company (the “Company”), to settle violations of U.S. sanctions and the Bank Secrecy Act (“BSA”) and related regulations, respectively.[1] The OFAC Settlement, the largest of OFAC’s digital asset-related enforcement actions to date, and the FinCEN Consent Order collectively result in the Company paying a civil penalty of approximately $30 million. Following OFAC’s release of its “Sanctions Compliance Guidance for the Virtual Currency Industry” (which we wrote about here)[2] and recent revelations regarding prosecution by the U.S. Department of Justice of digital asset-related U.S. sanctions violations (which we wrote about here),[3] this joint OFAC-FinCEN enforcement action illustrates the U.S. government’s continued focus on the digital asset industry’s compliance with U.S. sanctions and the potentially significant penalties parties can face for U.S. sanctions and BSA violations.
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October 2022
FINCEN’s Corporate Beneficial Ownership Reporting Rule: Significance for Investment Advisers
By Robin M. Bergen, Patrick Fuller, Michael G. Sanders, Ben Rosenblum & Benjamin Hayes on
On September 30, 2022, the Financial Crimes Enforcement Network (“FinCEN”) of the Department of the Treasury adopted a final rule (the “Final Rule”) to implement the beneficial ownership reporting requirements of the Corporate Transparency Act (“CTA”), as part of the Anti-Money Laundering Act of 2020. The CTA and Final Rule require a range of U.S. entities, and non-U.S. entities registered to do business in the United States, to report information on their underlying beneficial owners who are individuals to FinCEN. Notably, certain investments advisers exempt from registration and subsidiaries of private fund clients of investment advisers will be subject to these reporting requirements.
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