Kraken to pay Treasury for sanctions violation

US Department of Treasury Office of Foreign Asset Control has settled the deal with the crypto exchange Kraken for Iran sanctions violation.

The U.S.-based exchange Kraken is obliged to pay the Treasury $362,158.70 for a failure to provide the services for Iranian citizens:

Although Kraken maintained controls intended to prevent users from initially opening an account
while in a jurisdiction subject to sanctions, at the time of the apparent violations, Kraken did not
implement IP address blocking on transactional activity across its platform. According to IP
address data, account holders who established their accounts outside of sanctioned jurisdictions
appear to have accessed their accounts and transacted on Kraken’s platform from a sanctioned
jurisdiction.

The investigation of Kraken’s affiliation with Iranian users started with a Jul. 26 report of the New York Times, when anonymous sources familiar with the matter leaked to the media outlet, stressing the exchange provides services outside the U.S.-sanctioned list. After that, the OFAC confirmed the information from an anonymous source, which consequenced in the ruling that Kraken is obligated to pay for apparent violation of the law.

Related: Iranian Users Banned From OpenSea, The Company Says It Has to Comply With Ongoing US Sanctions Against Iran

Kraken’s Chief Legal Officer Marco Santori commented on the deal:

“Kraken is pleased to have resolved this matter, which we discovered, voluntarily self-reported, and swiftly corrected.”

OFAC states that between Oct. 14, 2015 and Jun. 29, 2019, crypto exchange Kraken engaged in 826 apparent violations of the Iranian Transactions and Sanctions Regulations, which combines about $1.680.577 for persons found to be in Iran at the time.

Kraken will invest an additional $100,000 in sanctions compliance control to add up to the deal.

Marco Santoni, Chief Legal Officer of Kraken, said:

“With these enhanced systems in place, we are in a stronger position to continue our mission of accelerating the adoption of cryptocurrency so people from around the world can achieve financial freedom and inclusion.”