Report: Digital Currency Exchange Kraken Under Investigation for Violating OFAC Sanctions

On Tuesday, a newly published report details that the cryptocurrency exchange Kraken is under federal investigation for allegedly violating U.S. sanctions, according to five people familiar with the matter. The unknown sources explained that the inquiry into Kraken started in 2019, and it’s accused of allowing users from sanctioned countries like Iran access to the digital currency trading platform.

Treasury’s Office of Foreign Assets Control Is Allegedly Investigating Kraken

The San Francisco-based crypto exchange Kraken is allegedly under investigation by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), according to a report published by the New York Times (NYT) on July 26, 2022. Kraken founded in July 2011 by Jesse Powell is one of the oldest digital currency exchanges in the world.

The NYT report cites “five people affiliated with the company or with knowledge of the inquiry.” Furthermore, the report also says the anonymous sources did not want to be named “for fear of retribution from the company.” According to the editorial’s summary, OFAC has been investigating Kraken since 2019 for allowing users from sanctioned countries to acquire crypto assets.

The five people familiar with the matter concerning Kraken say that they expect the U.S. government to impose a fine against the San Francisco trading platform. Kraken got hit with a fine last year when U.S. ​​Commodity Futures Trading Commission (CFTC) charged the firm for “illegally offering margined retail commodity transactions in digital assets.”

At that time, the CFTC levied $1.25 million from the San Francisco crypto company’s parent firm Payward Ventures Inc., and told Kraken to “cease and desist from further violations.” The NYT reached out to Kraken and the company’s chief legal officer, Marco Santori, noted that the exchange “does not comment on specific discussions with regulators.” Santori further said:

Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues.

Speaking with a U.S. Treasury spokeswoman, the NYT reporters said OFAC gave a similar statement. “[The U.S. Treasury] does not confirm or comment on potential or ongoing investigations,” the individual from the Treasury said. The people familiar with the matter said the OFAC inquiry started in 2019 when a former employee initiated legal proceedings against Kraken and later settled the case.

NYT’s anonymous sources note that OFAC started looking into Kraken accounts around that same time and the accounts allegedly stemmed from Iran, Syria, and Cuba. The accusations that claim Kraken is under federal inquiry follow the recent report from Bloomberg that says the U.S. Securities and Exchange Commission (SEC) is reportedly probing Coinbase over alleged unregistered securities violations.

Bloomberg’s report concerning Coinbase is similar to the New York Times editorial on Kraken as it cites unnamed people familiar with the matter. Both news publications have cited people familiar with the matter on various occasions in recent times, and more specifically, stories concerning the bankrupt crypto lender Celsius.

What do you think about the report concerning Kraken that says the exchange is allegedly under federal investigation? Let us know what you think about this subject in the comments section below.

Earning Passive Income With Crypto

Related Posts

SHIB Metaverse: How Will it Impact the Price of Shiba Inu?

SHIB Metaverse: Shiba Inu is one of the best-known cryptocurrencies on the market, and was launched in August 2020. A little over 5 months ago, it announced…

PoW Miners Rake in Profits Mining ETH Until the End, Ethash Networks Expect a Boost, JPMorgan Strategists Say ETC Could Benefit

In just over a month’s time, The Merge is likely to be implemented on the Ethereum blockchain and the network’s proof-of-work (PoW) miners will be forced to…

Another Stablecoin Depegs From USD Parity, Polkadot-Based AUSD Loses 98% in Value

2022 has been the year of broken stablecoins as a myriad of dollar-pegged crypto assets depegged from their dollar value this year. On August 14, the Polkadot-based…

Weekly NFT Sales Show Improvement, Fantom and Immutable X NFT Volume Spikes

Non-fungible token (NFT) sales managed to climb higher during the last seven days than the previous week’s overall sales. This week’s NFT sales managed to jump over…

Aave Responds to Blocking Addresses Over Tornado Cash Clampdown

DeFi lending protocol Aave Protocol said the TRM API on its app was responsible for blocking addresses that received ETH from unknown sources through Tornado Cash. In…

Brazilian Crypto Investment Platform Bluebenx Stops Withdrawals Under Hack Allegations

Bluebenx, a Brazil-based cryptocurrency investment platform, suspended withdrawals last week due to an alleged hack that made the company lose more than $31 million. The company announced…