Cointime

Download App
iOS & Android

Kraken Settles With the SEC and Pays $362K for Violating U.S Sanctions on Iran

The U.S. Office of Foreign Assets Control (OFAC) has made it clear that it will keep imposing fines on cryptocurrency exchanges for alleged violations of the U.S. sanctions system. This time it was the turn of Kraken, one of the oldest crypto exchanges in the U.S. Who will be next?

Kraken, a well-known American crypto exchange, agreed to pay a fine of more than $362,000 to the Treasury Department’s Office of Foreign Assets Control (OFAC) for “apparently” violating U.S. sanctions against the people of Iran.

According to the OFAC release, Kraken agreed “to settle its potential civil liability,” which could come along with possible violations of the Iranian Transactions and Sanctions Regulations.

In addition, the exchange agreed to “invest” $100,000 in certain additional sanctions compliance controls, including training its staff and implementing technical controls to assist in sanctions detection.

Kraken Processes Over $1.6 Million in Iranian User Transactions

Despite having a sanction compliance and anti-money laundering program in place, Kraken processed 826 transactions, totaling approximately $1,680,577.10, on behalf of users who “appeared” to be located in Iran. Cryptopotato first reported about the SEC investigations on the exchange back in June of 2022.

These transactions were conducted between October 14, 2015, and June 29, 2019. This means that regulators are doing a thorough job on the exchanges’ transaction history to avoid any possible evasion of U.S. sanctions.

According to OFAC, Kraken incurred 826 “apparent violations” of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. § 560.204.

Kraken Could Have Faced a Fine of $272 Million.

Kraken implemented automatic blocking of I.P. addresses linked to Iran and multiple other blockchain monitoring and analysis tools after realizing the problems it was incurring and informing regulatory authorities.

Thanks to its commitment to resolving the problem and its acceptance of guilt, Kraken avoided paying a maximum fine amounting to more than $272 million.

Kraken thus joins the list of exchanges fined by OFAC, including Bitgo for $98,000; BitPay for more than $500,000; and Bittrex, which agreed to pay more than $53 million to OFAC and FinCEN for alleged violations of the sanctions programs.

Comply And Criticized The Law When Necessary

Jesse Powell, the former CEO of Kraken, has been very vocal about his libertarian views, engaging in debates and even taking action when he considered it to be pertinent. For example, he refused to comply with a demand from the Ukrainian government to block Russian users.

He also moved Kraken’s HQs away from New York in 2018 when the infamous BitLicense made it difficult for the exchange to operate properly. Powell had strong words against the government back then when he criticized the law and all the requirements it contained:

“To service New York today, what we’d have to do is create a special purpose entity just to service New York”

This settlement puts an end to a controversial chapter of Kraken’s history. The exchange is now fully clear in terms of regulatory obligations with the United States.

Comments

All Comments

Recommended for you

  • BTC breaks through $92,000

     the market shows BTC breaking through $92,000, currently at $92,023.91, with a 24-hour decline of 0.13%. The market is highly volatile, please manage your risk accordingly.

  • WLFI launches lending marketplace powered by Dolomite

     WLFI launches a lending market supported by Dolomite.

  • Spot gold rose more than $300 in January.

     spot gold has risen above $4620/oz, with a daily increase of 2.44%, accumulating a rise of over $300 in the first month of the new year.

  • Hassett: Still interested in a Fed position

    White House National Economic Council Director Hassett: Still interested in the Federal Reserve position. It is unknown whether U.S. President Trump has approved an investigation into the Federal Reserve. Federal Reserve Chairman Powell is a good person.

  • BTC falls below $91,000

     the market shows BTC fell below $91,000, currently at $90,997.44, with a 24-hour increase of 0.26%. The market is highly volatile, please manage your risks accordingly.

  • The US spot Ethereum ETF saw a net outflow of $68.57 million last week.

    according to SoSoValue data, during the trading days last week (January 5 to January 9, Eastern US time), the US spot Ethereum ETF had a net outflow of 68.57 million USD.

  • BTC breaks through $92,000

    the market shows BTC breaking through $92,000, currently at $92,041.92, with a 24-hour increase of 1.49%. The market is volatile, please manage your risk accordingly.

  • Japanese Prime Minister considers dissolving the House of Representatives; USD/JPY rises sharply.

    Japanese Prime Minister is considering dissolving the House of Representatives. The USD/JPY exchange rate quickly rose by 0.66% to 157.95, hitting a new one-year high. 

  • a16z announced the completion of a $15 billion funding round, which will focus on investments in AI and crypto.

    a16z has just completed raising over $15 billion in funds. This batch of funds includes: American Dynamism Fund ($1.176 billion), Apps Fund ($1.7 billion), Bio + Health Fund ($700 million), Infrastructure Fund ($1.7 billion), Growth Fund ($6.75 billion), and other venture capital strategy funds ($3 billion). The announcement states that its mission is to ensure the United States wins the technology competition in the next 100 years, focusing on winning key infrastructures such as AI and crypto. In addition, it will promote the application of related technologies in fields such as biology, health, defense, public safety, education, and entertainment.

  • BTC falls below $90,000

     market shows BTC fell below 90,000 USD, currently at 89,996.08 USD, 24-hour decline reached 0.43%, market volatility is high, please manage risk properly.