One of the world’s largest cryptocurrency exchanges is under investigation by the Treasury Department for allegedly violating U.S. sanctions with Iran and other countries, The New York Times reported Tuesday.
The Office of Foreign Assets Control (OFAC) is expected to fine Kraken, a private cryptocurrency firm, for allegedly violating long-standing U.S. sanctions, five anonymous individuals familiar with the matter told the NYT. The investigation began in 2019, the same year that former employee Nathan Peter Runyon sued the company for failing to comply with sanctions.
“Kraken does 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,” Marco Santori, Chief Legal Officer at Kraken, told the Daily Caller News Foundation. “Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues.”
A spreadsheet sent internally to Kraken employees by Kraken President Jesse Powell revealed that the company had “verified accounts” in several countries sanctioned by the US government, according to the NYT. This includes 1,522 “verified accounts” in Iran, 149 in Syria, and 83 in Cuba. (RELATED: FBI Adds ‘Cryptoqueen’ Accused Of Defrauding Investors Out Of $4 Billion To Ten Most Wanted List)
The data was removed shortly after being posted, the NYT reported.
In private Slack messages, Powell said that it was important to consider the “risk” of violating the law, according to the NYT.
“Not following the law would by default be ‘ill-advised,’ but it always has to be considered as an option,” he said, according to the New York Times.
I’m asking all major crypto exchanges to block addresses of Russian users.
It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.
— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022
1/6 I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.
— Jesse Powell (@jespow) February 28, 2022
Powell resisted freezing Russian accounts in a tweet, in response to a tweet by the Ukrainian government requesting that Russian users be blocked from crypto platforms.
On July 11, Binance, the largest crypto platform in the world, was found to have violated sanctions in Iran, continuing to process crypto trades even after the U.S. reimposed sanctions, according to Reuters.
OFAC and the Treasury Department did not respond to requests for comment from the Daily Caller News Foundation.
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