Investigation Going On Kraken After Alleged Sanctions Violation


The U.S. Treasury Department is looking into the cryptocurrency exchange Kraken because it believes Iranian consumers were permitted to use the site’s services in defiance of federal restrictions.

The Department of Treasury was reportedly planning to punish the exchange, according to a story in the New York Times published on Tuesday. However, the report did not offer a timeframe again for enforcement action. The firm has sent a statement through their Chief Legal Office stating that they will not comment on any specific discussion with the regulators.

Marco Santori, the Chief Legal Officer of the firm, also added that Strong compliance controls are in place at Kraken, and the company is expanding its compliance staff to keep up with the expansion of its business. Kraken carefully monitors adherence to sanctions legislation and generally alerts regulators to potential problems.

Kraken Under Investigation As They Allegedly Violated Sanctions:

According to a recent Reuters investigation, Binance, a cryptocurrency exchange, continued to accept trades from Iranian consumers despite the sanctions and the company’s embargo on doing business in Iran.

The U.S. government has historically used federal sanctions as a weapon to prevent certain people or countries from using the international financial system. Iranian cryptocurrency users and addresses have already faced sanctions.

Iranian users have been systematically barred on several cryptocurrency platforms. Iranian users were blocked by the NFT trading platform OpenSea earlier this year, while Iranian students were barred from an Ethereum incubator’s development boot camp in 2021 by ConsenSys.

Treasury also has a history of fining cryptocurrency businesses. Both the cryptocurrency exchange BitGo and the payment processor BitPay have been hit with hefty Treasury fines for purported sanctions violations.

Jesse Powell, the CEO, and co-founder of Kraken has made no secret of his desire to oppose laws that he believes are unjust, including international sanctions.