You’ve likely heard of Bitcoin, the virtual currency that has made headlines over the last couple of years for its increasing popularity and wild swings in value. However, you may not have taken notice of other, lesser-known virtual currencies being developed by startup technology companies. But the U.S. Department of Treasury is watching closely.

Ripple Labs, which manages its own cryptocurrency called XRP, and which has raised over $34 million in venture capital from investors, was recently slapped with a first-of-its-kind $700,000 penalty by the Financial Crimes Enforcement Network (FinCEN). The fine comes as a result of a settlement with FinCEN and stems from violations of regulations under the Bank Secrecy Act and for failure to register with FinCEN despite operating a money service business. The company is also being penalized for not implementing an anti-money laundering program.

Cryptocurrencies such as Bitcoin and XRP have drawn increased scrutiny by federal regulators due to the fact that, despite a number of legitimate uses, they can be used by cyber criminals to anonymously conduct business and store funds out of the reach of law enforcement.

In November 2014, we wrote extensively about cryptocurrencies, including the fact the U.S. Treasury issued a letter stating that exchanges of virtual currency will be subject to the same regulations as traditional money-order providers. This action backs up that assertion.

“Virtual currency exchangers must bring products to market that comply with our anti-money laundering laws,” said FinCEN Director Jennifer Shasky Calvery in a statement. “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.”

In its own statement, Ripple Labs stated that “it has cooperated extensively with the government during its investigation and has taken a number of important steps over the years to build and strengthen our compliance programs.”

Virtual currency exchanges remain the “Wild West” of technology and finance in many respects. Regulations are evolving and - as evidenced by the fine issued against Ripple Labs - enforcement actions against industry participants are beginning.