- within Insolvency/Bankruptcy/Re-Structuring topic(s)
On December 9, FinCEN announced a consent order imposing a $3.5 million civil money penalty on a peer-to-peer virtual asset trading platform, alleging willful violations of the Bank Secrecy Act. FinCEN alleged that the platform's compliance failures allowed it to process substantial volumes of transactions connected to criminal activity, sanctions exposure, and other high-risk conduct over an extended period.
According to FinCEN, the platform operated a hosted virtual asset wallet and a peer-to-peer marketplace that connected buyers and sellers using hundreds of payment methods. FinCEN alleged that, over several years, the platform processed transactions involving more than $500 million in suspicious activity, including activity linked to sanctioned jurisdictions, ransomware attacks, darknet marketplaces, terrorist financing, and other illicit conduct. FinCEN also alleged that the platform did not file suspicious activity reports for significant portions of this activity during the relevant period.
FinCEN stated that it considered mitigating factors in determining the penalty, including leadership changes, engagement of outside consultants, and a review to identify and report previously unreported suspicious activity.
Putting It Into Practice: As the CFPB pulls back from active enforcement, other federal agencies continue to exercise their enforcement and supervisory authorities under existing statutory frameworks (previously discussed here and here). Federal agencies are expected to remain active in oversight and supervision, particularly in areas such as anti-money laundering and money services business registration that sit outside the CFPB's core jurisdiction. Market participants should continue to monitor federal enforcement developments and update compliance frameworks as necessary to remain aligned with evolving expectations.
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