The Financial Crimes Enforcement Network (FinCEN) announced that it has fined virtual currency exchange site Ripple Labs with a $700,000 fine for failing to comply with the Bank Secrecy Act, the first time the agency has launched civil enforcement against such an organization. Ripple Labs, a San Francisco-based company, facilitated transfers and exchanges of the virtual currency Ripple (the second largest in terms of market cap next to Bitcoin). Specifically, FinCEN said that the company willfully violated several parts of the Bank Secrecy Act, including failing to register with FinCEN, failing to implement and maintain an adequate anti-money laundering program, and not reporting suspicious activity related to several financial transactions. 

“Virtual currency exchangers must bring products to market that comply with our anti-money laundering laws,”said FinCEN Director Jennifer Shasky Calvery. “Innovation is laudable but only as long as it does not unreasonably expose our financial system to tech-smart criminals eager to abuse the latest and most complex products.” 

Ripple Labs agreed to settle with the government in order to avoid criminal charges, agreeding to pay the $700,000 fine, as well as undertake remedial measures to put the company into compliance with the BSA.