Crypto Exchange Investigated Over Alleged Iran Sanctions Violation


Cryptocurrency exchange Kraken is under investigation by the United States Department of the Treasury’s Office of Foreign Assets Control on suspicion of allowing Iranian users to utilize its services in violation of federal economic sanctions against Iran.

According to a report in the New York Times, the Treasury Department may fine the exchange, although it has not yet suggested a timetable for doing so.

To CoinDesk, Kraken sent a statement from Chief Legal Officer Marco Santori saying the exchange would not comment on “specific discussions with regulators.”

“Kraken has robust compliance measures in place and continues to grow its compliance team to match its business growth. Kraken closely monitors compliance with sanctions-related legislation and generally even reports potential issues to regulators,” Santori said in a statement.

A recent investigation by Reuters news agency found that cryptocurrency exchange Binance continued to allow Iranian users to transact on the platform despite sanctions and the company’s ban on doing business there.

Federal sanctions have been a tool used by the US government to prevent individuals or nations from accessing the global financial system. Several cryptocurrency users and addresses in Iran have been sanctioned in the past.

Read more:
• Binance and Other Crypto Firms Accelerate Hiring in Response to Industry Job Cuts

Several crypto platforms have proactively blocked Iranian users. Non-fungible tokens (NFTs) marketplace OpenSea, for example, blocked Iranian users earlier this year, while ConsenSys blocked Iranian students from a programming course in 2021.

Those who did not respect, however, were fined. BitGo, a cryptocurrency exchange, and BitPay, a transaction processor, faced hefty fines from the Treasury for alleged sanctions violations.

It is not today that Kraken CEO and co-founder Jesse Powell has openly demonstrated his willingness to challenge regulations he considers unfair, including international sanctions.

In February, after the Russian invasion of Ukraine, Powell resisted calls to freeze the accounts of Russian Kraken users, tweeting: “Crypto world, where arbitrary lines on maps don’t matter anymore, where they don’t have to worry about getting caught.” into a widespread and indiscriminate confiscation of wealth.”

In a memo released in June, Kraken also described itself as a company that believes “weaponing the financial system is immoral” and vowed to “engage in disputes with government agencies where outdated laws are unfairly exclusive.”

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