ShapeShift agreed to a $750,000 settlement with the U.S. Treasury’s Office of Foreign Assets Control for processing crypto transactions tied to sanctioned countries; the penalty resolves OFAC claims that the defunct exchange lacked a sanctions compliance program and handled over $12.5 million from sanctioned jurisdictions.
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OFAC settlement resolves alleged sanctions violations by ShapeShift.
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ShapeShift processed more than $12.5 million in crypto from Cuba, Iran, Sudan and Syria (Dec 2016–Oct 2018).
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ShapeShift paid $750,000 to the U.S. Treasury; the platform closed in 2021 and had previously settled SEC claims for $275,000.
ShapeShift OFAC settlement: ShapeShift pays $750,000 to OFAC for sanctions violations—read details and implications for crypto compliance. Learn more.
What is the ShapeShift OFAC settlement?
The ShapeShift OFAC settlement is a $750,000 payment to the U.S. Department of the Treasury resolving claims that ShapeShift processed crypto transactions linked to sanctioned countries without a sanctions compliance program. The settlement addresses activity from December 2016 to October 2018, per Treasury findings.
How did ShapeShift allegedly violate U.S. sanctions?
U.S. authorities alleged ShapeShift accepted funds from users in sanctioned jurisdictions—Cuba, Iran, Sudan and Syria—and processed over $12.5 million in such transactions. Regulators said the platform had no sanctions screening program and only adopted controls after receiving an OFAC administrative subpoena.
When did ShapeShift implement compliance controls?
According to the Treasury Department, ShapeShift implemented a sanctions compliance program only after receiving an administrative subpoena from OFAC. Prior to that, the exchange operated without systematic screening of users or transactions for ties to sanctioned jurisdictions.
Frequently Asked Questions
Did the settlement involve criminal charges?
No. The reported resolution was an administrative civil settlement with the U.S. Department of the Treasury’s Office of Foreign Assets Control; there is no public record in this notice of criminal charges.
How does this affect users who traded on ShapeShift?
Individuals who used ShapeShift while it was operational should review their transaction records. The settlement focuses on the platform’s compliance failures rather than prosecutions of individual users.
What other enforcement did ShapeShift face?
ShapeShift previously settled with the U.S. Securities and Exchange Commission for $275,000 and agreed to a cease-and-desist order related to registration requirements for broker-dealer or exchange activity.
Comparative Penalty Summary
| Enforcement Body | Action | Amount | Period |
|---|---|---|---|
| U.S. Department of the Treasury (OFAC) | Sanctions settlement | $750,000 | Dec 2016 – Oct 2018 |
| U.S. Securities and Exchange Commission (SEC) | Registration-related settlement | $275,000 | Prior enforcement action |
Key Takeaways
- Regulators enforced sanctions compliance: OFAC held ShapeShift responsible for processing crypto tied to sanctioned jurisdictions without proper screening.
- Financial impact was limited: The $750,000 penalty reflected ShapeShift’s closed status and limited recoverable assets.
- Compliance lessons for industry: Crypto platforms should implement sanctions screening, KYC, and robust audit trails to mitigate enforcement risk.
Conclusion
ShapeShift’s $750,000 settlement with the U.S. Treasury underscores the enforcement risk for crypto platforms that operate without sanctions controls. Industry participants and compliance teams should treat this outcome as a reminder to implement risk-based screening and maintain clear audit records. COINOTAG will monitor related regulatory developments and updates.
