By Shelly Melancon (Switzerland)
On July 26th, a news report stated that the US government was investigating the Kraken exchange. The report added that the crypto exchange had violated US sanctions.
Furthermore, the investigation began in 2019 after news spread that the platform allowed sanctioned nations to trade. Examples of such sanctioned countries include Iran.
The US OFAC Reportedly Investigating Kraken
The OFAC (Office of Foreign Assets Control) under the US Treasury investigates Kraken for breaking US sanctions. The New York Times published the report on July 26th.
Meanwhile, Kraken is among the oldest crypto exchange globally, founded in 2011. Jesse Powell is the founder of the exchange platform.
According to the New York Times, anonymous sources confirmed that OFAC began the investigation in 2019. The agency alleged that Kraken allowed sanctioned nations to have access to crypto trading.
Additionally, the anonymous sources said the US authorities might fine the exchange. In 2021, the US CFTC (Commodity Futures Trading Commission) fined the crypto platform.
This was after the exchange offered illegal retail commodities to clients. The CFTC fined the parent company of Kraken called Payward Ventures. Afterward, it told the exchange to desist from more violations.
Also read:Meanwhile, the New York Times contacted the exchange. Marco Santori, the company’s legal counsel, said he could not comment on regulatory discussions.
Additionally, Santori said Kraken usually ensures full compliance with regulations. It also reports potential issues to US regulators.
Also, the NYT had reached out to the US Treasury. However, the spokesperson gave a similar reply that they could not disclose more info on the matter.
OFAC Uncovered Kraken Accounts Linked To Sanctioned Nations
In 2019, a former worker at Kraken sued the company for an undisclosed reason. However, they had settled the case.
This was what prompted the OFAC to begin investigating the platform. The Kraken accounts the agency was investigating then were from Cuba, Syria, and Iran.
Meanwhile, Bloomberg reported a similar case about the Coinbase exchange platform. The Bloomberg report also cited anonymous individuals with knowledge about the matter.
In 2022, Reuters also accused popular exchange, Binance, of offering crypto services to Iranians. This was against the sanctions imposed by the US on such nations.
Binance replied that the company is not a US-based firm. However, it has followed all regulations in the country due to its stand as a law abiding firm.
Furthermore, the CEO, Changpeng Zhao, alleged that the Iranian users must have been using VPN. This made it difficult for its cyber team to track their location.
In other news, the US SEC (Securities and Exchange Commission) is investigating Coinbase for allegedly offering unregistered securities.
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