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An official statement states that US-based cryptocurrency exchange Kraken has agreed to pay $362,159 to resolve a dispute with the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury. Kraken may have breached US sanctions against Iran by providing services to Iranian consumers. The exchange consents to spend $100,000 installing additional sanctions compliance measures as part of its settlement with the US Treasury.
US Department of the Treasury (Source: OFAC)
Kraken's Compliance
According to the terms of the settlement, Kraken allegedly carried out 826 transactions worth more than $1.68 million on behalf of customers who might have been based in Iran. The settlement asserts that despite the fact that Kraken already had a sanctions compliance structure in place to prevent users from signing up in restricted locations, the exchange did not implement IP address blocking on the activities taking place on its platform at the time of the alleged violation.
According to IP address information gathered by the US Treasury Department, this suggests that some users were able to register and conduct transactions on the website from countries that were subject to sanctions, such as Iran. Kraken's chief legal officer, Marco Santori, reportedly told CoinDesk that the company is "pleased to have resolved this matter, which we discovered, voluntarily self-reported and swiftly corrected.”
Santori further added:
Final Thoughts
The fine comes as other cryptocurrency businesses work to regain users' faith following FTX's demise. Since then, BlockFi, a major cryptocurrency lender, has declared bankruptcy, and the largest cryptocurrency lender Genesis has stopped accepting withdrawals. Some cryptocurrency exchanges, including Coinbase and Binance, have lately made their proof of reserves public in an effort to be more transparent
An official statement states that US-based cryptocurrency exchange Kraken has agreed to pay $362,159 to resolve a dispute with the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury. Kraken may have breached US sanctions against Iran by providing services to Iranian consumers. The exchange consents to spend $100,000 installing additional sanctions compliance measures as part of its settlement with the US Treasury.
US Department of the Treasury (Source: OFAC)
Kraken's Compliance
According to the terms of the settlement, Kraken allegedly carried out 826 transactions worth more than $1.68 million on behalf of customers who might have been based in Iran. The settlement asserts that despite the fact that Kraken already had a sanctions compliance structure in place to prevent users from signing up in restricted locations, the exchange did not implement IP address blocking on the activities taking place on its platform at the time of the alleged violation.
According to IP address information gathered by the US Treasury Department, this suggests that some users were able to register and conduct transactions on the website from countries that were subject to sanctions, such as Iran. Kraken's chief legal officer, Marco Santori, reportedly told CoinDesk that the company is "pleased to have resolved this matter, which we discovered, voluntarily self-reported and swiftly corrected.”
Santori further added:
Final Thoughts
The fine comes as other cryptocurrency businesses work to regain users' faith following FTX's demise. Since then, BlockFi, a major cryptocurrency lender, has declared bankruptcy, and the largest cryptocurrency lender Genesis has stopped accepting withdrawals. Some cryptocurrency exchanges, including Coinbase and Binance, have lately made their proof of reserves public in an effort to be more transparent
