The Financial Crimes Enforcement Network (FinCEN) has for the first time penalized what it dubs a “peer-to-peer cryptocurrency exchanger” for breaking anti-money laundering (AML) rules.

The U.S. regulator announced Thursday that California resident and cryptocurrency trader Eric Powers failed to comply with the Bank Secrecy Act’s (BSA) registration and reporting requirements during 2012–2014.

While conducting the business of buying and selling bitcoins on the internet, Powers did not register himself as a money transmitter or as a money services business, FinCEN said.

He also failed to report suspicious transactions in cryptocurrency and fiat currency. For instance, the regulator said, Powers conducted around 160 transactions of bitcoins worth about $5 million and also conducted over 200 transactions involving the physical transfer of more than $10,000 in currency, but did not file a single currency transaction report.

Powers also processed several suspicious transactions without ever filing a suspicious activity report, including doing business related to the darknet marketplace Silk Road.

Powers has admitted to the violations, according to the agency.

FinCEN director, Kenneth A. Blanco, said that “Obligations under the BSA apply to money transmitters regardless of their size.”

Blanco further said that there were indications that Powers “specifically was aware of these obligations, but willfully failed to honor them,” adding:

“Such failures put our financial system and national security at risk and jeopardize the safety and well-being of our people, as well as undercut responsible innovation in the financial services space.”

As a result, Powers has been fined $35,000 and is barred from providing money transmission services.

Back in 2014, FinCEN ruled that bitcoin payment processors and exchanges are money services businesses under U.S. law. Last year, the regulator said that money transmitter rules apply even to those who conduct initial coin offerings or ICOs.

FinCEN image via Shutterstock