US Treasury Department suspects Kraken crypto exchange of violating sanctions

The agency initiated an investigation to find out if the platform allowed users from Iran to buy and sell cryptocurrency

27.07.2022 - 09:00

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What’s new? The US Treasury Department’s Office of Foreign Assets Control (OFAC) has initiated an investigation into cryptocurrency exchange Kraken on suspicion of violating economic sanctions against Iran. According to New York Times, five people associated with the company gave a tip to the exchange. Marco Santori, chief legal officer at Kraken, said that the company “does not comment on specific discussions with regulators.” The Treasury Department also declined to comment.

Material by New York Times

What else is known about the investigation? The Treasury Department began monitoring the crypto exchange back in 2019 after a former employee of the company accused it of making illegal profits. According to sources, Kraken CEO Jesse Powell said that year that he was considering breaking the law if the benefits to the company outweighed potential penalties.

In this, the company’s chief legal officer noted that “Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues.” Kraken served 1522 users from Iran, 149 from Syria, and 83 from Cuba in 2022, according to the internal correspondence of the exchange’s employees.

What is known about Kraken? It is a cryptocurrency exchange registered in the United States in 2011. The founder and head of the company is Jesse Powell. More than 120 digital and 7 fiat currencies are available for trading on the platform. Kraken has more than 8 million traders worldwide as customers. As of July 27, the daily trading volume is $518,6 million, according to aggregator CoinGecko.

Earlier, Reuters reported that cryptocurrency exchange Binance served clients from Iran bypassing US sanctions until September 2021, when it imposed a mandatory user identification. In this, operation in Iran was not carried out through the US division, which may threaten the exchange with secondary sanctions, according to journalists.

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