Kraken is Being Investigated for Violation of US Sanctions Regime

Last Updated on 29 mins by cryptoevent

That Kraken is examined until Federal government on suspicion of violating American sanctions. octopus is one of the world’s leading cryptocurrency exchanges, and the government suspects that Kraken has allowed users to trade digital assets in Iran and other countries.

Five people connected to the company or aware of the investigation broke the news.

Kraken is under investigation, and when did it start?

According to the person, who requested anonymity out of fear of retaliation from the company, the Treasury Department’s Office of Foreign Assets Control has been investigating the Kraken case since 2019 to prove the company’s guilt. Because of the 1,979 US sanctions on Iran By banning the export of goods or services to individuals or companies, the largest US cryptocurrency company Kraken would face enforcement action from OFAC.

Has the company already been confronted with official measures?

Yes! Kraken has faced such problems in the past. For example, Kraken is a privately held company with a market cap of approximately $11 billion. Users can buy, sell and hold various cryptocurrencies through the company. However, the company seems to have been involved in other activities. As a result, the company has faced regulatory action so far. For example, last year the CFTC fined the company $1.25 million for providing an illegal trading service.

How is the company responding to this issue?

When asked, a Treasury Department spokeswoman said the organization is not commenting on potential or ongoing investigations and is committed to implementing “sanctions to protect U.S. national security.” Chief Legal Officer Marco Santori states that Kraken “does not comment on specific interactions with regulators”. He said Kraken “closely monitors compliance with sanctions legislation and generally reports any potential difficulties to regulators.”

Kraken CEO Jesse Powell suggested in an internal employee benefits discussion in 2019 that he would consider breaking the law in various circumstances if the benefits to the company outweighed the potential fines. In addition, Mr. Powell fomented opposition within the organization on issues of race and gender.

Sanctions and crypto space

Sanctions are one of the most effective tools used by the US to change the behavior of countries it does not consider allies. However, due to the lack of a traditional banking system, which makes it difficult for the government to police money, cryptocurrencies carry a risk of sanctions.

In October, the Treasury Department released a 30-page compliance manual that warned that cryptocurrencies “could hamper the effectiveness of American sanctions” and advised cryptocurrency companies to use geolocation capabilities to single out consumers in restricted areas.

“The fact that crypto can move without a bank or middleman means that exchanges are responsible for some kind of financial compliance,” said Hailey Lennon, attorney at Anderson Kill. The latter specializes in regulatory issues in the cryptocurrency industry.

Russian invasion of crypto industry and US sanctions

As a result of Russia’s invasion of Ukraine earlier this year, sanctions have become a contentious issue in the crypto world. Politicians fear Russians will use Bitcoin or other digital assets to evade sanctions.

Because the cryptocurrency industry is highly regulated and rapidly expanding, regulators have closely monitored the companies involved. The US Department of Justice recently indicted a former Coinbase employee for insider trading. Let’s see how it goes for Kraken!

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The post Kraken is under investigation for violating the US sanctions system, appeared first in Business 2 Community.

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