Kraken Exchange Faces Investigation for Sanction Violation

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Kraken encountered a similar suit in 2019. A former worker accused the firm of generating cash from accounts of sanctioned nations.

  • The United States Treasury investigated whether the Kraken exchange allowed Iranian to trade digital tokens.
  • The trading platform has been under the radar since 2019, and reports suggest it might encounter penalties, paying fine.
  • Cryptocurrency payment platforms BitPay and BitGo encountered massive fines for sanction violations.

The cryptocurrency exchange Kraken would encounter scrutiny from the U.S Treasury, which suspected it of allowing sanctioned nations to interact with crypto.

Reports from New York Times show Treasury assumes Kraken violated U.S sanctions. Remember, this is the powerful tool the United States uses to deal with nations that defy U.S overseas policy interests.

Kraken has allegedly allowed Iranians to purchase and sell digital coins. Five anonymous individuals familiar with the case revealed the Treasury’s OFAC (Office of Foreign Assets Control) has been probing the trading platform since 2019. It might slap Kraken with a massive fine soon.

Treasury’s spokesperson revealed that Treasury doesn’t comment on ongoing or potential investigations. He highlighted their dedication to using authority and available tools to impose sanctions that guard U.S national security.

The U.S sanctions against the mid-east country mean prohibiting exports from the nation. If the probe finds Kraken guilty, it would be the leading U.S crypto company to face OFAC actions connected to the Iranian sanctions.

Kraken has remained silent when questioned about the probe and the fine. Kraken’s CLO Marco Santori told Times that the firm doesn’t comment on discussions related to regulators.

Crypto Companies Crackdowns

The fed government has monitored multiple cryptocurrency firms as the market grows. For example, the California-based BitGo faced the law for 183 sanction violations and paid over $98,000 in fines in 2020. BitPay followed, enduring more than a $500K fine for 2,102 violations.

Kraken’s co-founder Jesse Powel shared data showing the locations of the individuals using the company. The spreadsheet revealed that 1,522 customers reside in Iran, 83 in Cuba, and 149 Syrians. Times noted that all are sanctioned countries.

Nevertheless, it is not the first time Kraken faced the Treasury. In 2019, the company’s former employer Nathan Peter Runyon revealed the firm used accounts of sanctioned nations to raise revenue. The suit ended in 2021.

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Editorial credit: salarko /

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