# Defunct ShapeShift Exchange Fined $750K by U.S. Treasury Over Sanctions Violations

*Author: Bankless*
*Published: Sep 24, 2025*
*Source: https://www.bankless.com/read/news/defunct-shapeshift-exchange-fined-750k-by-u-s-treasury-over-sanctions-violations*

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Shuttered crypto exchange ShapeShift agreed to pay a $750,000 penalty to the U.S. Treasury Department over allegations it violated sanctions laws by allowing users in countries like Cuba, Iran, Sudan, and Syria to transact through its platform.

## What’s the Scoop?
- **Alleged violations:** The Treasury said ShapeShift processed over $12.5 million in crypto transactions for users in sanctioned jurisdictions between 2016 and 2018.
- **No compliance program:** The agency claimed ShapeShift had no sanctions compliance procedures in place and only implemented one after receiving a subpoena from OFAC. Investigators said ShapeShift “had reason to know” it was serving users in restricted countries, including via IP address data.
- **Exchange history:** ShapeShift was founded in 2014 by crypto O.G. Erik Voorhees and became known for enabling anonymous token swaps without requiring KYC. It later ran into regulatory issues and transitioned to a DAO before shutting down its centralized operations.

### Bankless Take:
The decade-old nature of sanctions violation allegations against ShapeShift did not stop Treasury from pursuing a settlement. According to OFAC, ShapeShift had reason to know that its users were located in sanctioned jurisdictions based on their IP address data.

![](https://storage.ghost.io/c/e4/b7/e4b77544-5a37-4f0b-8824-8440aa348476/content/images/2025/09/image-2.png)*Source: [Office of Foreign Asset Control](https://ofac.treasury.gov/recent-actions/20250922_33)*
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