Kraken agrees to settle with US regulators over sanctions violations

Cryptocurrency exchange Kraken has agreed to pay the fine to settle civil liability related to the apparent Iran sanctions violations. As part of the OFAC deal, Kraken would pay more than $360,000 with a specific surcharge of $100,000.

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

Kraken fights OFAC

Kraken, one of the largest crypto exchanges, is currently facing these issues. In July 2022, the United States Treasury Department’s Office of Foreign Assets Control, or OFAC, investigated Kraken. He alleged that Kraken was serving customers from Iran and other sanctioned countries.

The investigation began as early as 2019. The New York Times cited “five people affiliated with the company or with knowledge of the investigation.” These people said that the US government could impose a fine on the exchange, which has already clashed with other regulators in the country.

According to the report, more than 1,500 users residing in Iran had accounts with Kraken as of June 2022. While 149 users in Syria and 83 in Cuba could also have accessed 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 on this sanctioned list. Doing business or offering services to the mentioned countries would result in sanctions.

settle the quarrel

OFAC has now settled with the virtual currency exchange incorporated in Delaware. In a Nov. 28 update, Kraken agreed to “distribute $362,158.70 to settle its potential civil liability for apparent Iran sanctions violations.”

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

OFAC added:

“Due to Kraken’s inability 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 transacted in virtual currency on Kraken’s platform.”

The crypto exchange platform has had a problematic relationship with regulators. Last year, the US-based cryptocurrency exchange received $1.25 million in fines for illegal trading activities.


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