American cryptocurrency exchange Kraken has finally settled with the United States Department of Treasury’s Office of Foreign Assets Control (OFAC) over its violation of sanctions against Iran. On the 28th of November, Kraken agreed to pay $362,158.70 “to settle its potential civil liability” and also an additional $100,000 in certain sanctions compliance controls.”
Chief Legal Officer for Kraken Marco Santori said in an email “Kraken is pleased to have resolved this matter, which we discovered, voluntarily self-reported and swiftly corrected. Even before entering into this resolution, Kraken had taken a series of steps to bolster our compliance measures.”
According to Santori, part of the compliance measures which Kraken has worked on include further strengthening control systems, expanding our compliance team, and enhancing training and accountability.
Kraken Offers Crypto Wallets to Iran Residents
In July, it was announced that the U.S crypto exchange was under investigation by the Treasury Department watchdog for allegedly permitting users of sanctioned territories to gain access to the platform. This investigation had almost two years before that time and with the way it was progressing, there were high suspicions that Kraken would be liable to pay a fine.
At that time, as many as 1,500 Kraken users were residents of Iran which has been under sanction since 1979. The U.S. sanction on Iran forbids the export of products and services to any business or individual in the region. Kraken violated this sanction when it provided those 1,500 Iranians with crypto wallets thereby, giving them the ability to buy and sell cryptocurrencies.
“Due to Kraken’s failure to timely implement appropriate geolocation tools, including an automated internet protocol (IP) address blocking system, Kraken exported services to users who appeared to be in Iran when they engaged in virtual currency transactions on Kraken’s platform,” OFAC said
“Kraken has robust compliance measures in place and continues to grow its compliance team to match its business growth. Santori responded
“Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues.”
The American exchange seems to have learned a lesson as it has suspended its offerings to investors in Russia due to several sanctions imposed on the nation.