Kraken agrees to settle with US regulators for sanctions violations

Cryptocurrency exchange Kraken has agreed to pay a fine to settle civil liability related to its apparent violation of sanctions on Iran. As part of the deal with OFAC, Kraken will pay more than $360,000 with a typical $100,000 add-on.

US regulators continue to crack down on cryptocurrency exchanges that violate regulations both within the borders and internationally.

Kraken battles OFAC

Kraken, one of the largest crypto exchanges, is currently dealing with these issues. In July 2022, the Office of Foreign Assets Control, or OFAC, of ​​the United States Department of the Treasury investigated Kraken. It alleged that Kraken served Iranian customers and other sanctioned countries.

The inquiries began in early 2019. The New York Times cited “five people affiliated with the company or with knowledge of the inquiry”. These individuals said that the US government could impose fines on the exchange, which it has already faced with other regulatory authorities in the country.

According to the report, as of June 2022, more than 1,500 users living in Iran had accounts on Kraken. While 149 users in Syria and 83 in Cuba were also able to access the crypto exchange.

The United States has imposed sanctions on Iran that prohibit the export of goods or services to businesses and individuals in the country since 1979. Cuba and Syria were also a part of this accepted list. Doing business or offering services in the countries mentioned will attract penalties.

settle a dispute

OFAC has now settled with a Delaware-incorporated virtual currency exchange. In a November 28 update, Kraken ‘agreed to pay $362,158.70 to settle its potential civil liability for apparent violations of sanctions against Iran.’

As part of its settlement with OFAC, Kraken has also agreed to invest an additional $100,000 in certain sanctions compliance controls.

OFAC added:

“Due to Kraken’s failure to timely implement appropriate geolocation tools, including an automated Internet Protocol (IP) address blocking system, Kraken exported services to users who appeared to be in Iran when they accessed virtual data on Kraken’s platform.” engaged in currency transactions.

Crypto exchange platforms have had a problematic relationship with regulatory boards. Last year, a US-based cryptocurrency exchange received a fine of $1.25 million for illegal trading activities.


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