(Bloomberg) — U.S. authorities effectively tightened their grip on virtual currencies, reaching a settlement with a San Francisco-based start-up that regulators accused of negotiating a quarter-million-dollar deal with a convicted explosives dealer.

Ripple Labs Inc. agreed to pay $700,000 to settle allegations of poor money-laundering controls with the U.S. Justice Department, the Internal Revenue Service and Financial Crimes Enforcement Network, or FinCEN, the enforcement arm of the U.S. Treasury Department.

Tuesday's settlement is the first civil enforcement action against a virtual currency exchanger, FinCEN said in a statement. It enforces rules that FinCEN laid out in 2013 that required all virtual currency exchangers to register with the agency.

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