Crypto exchange Kraken is reportedly under investigation for allegedly violating federal sanctions and providing services to Iranians. The US Department of Treasury is investigating Kraken, the NYTimes sources said.
The US Treasury Department has been keeping Kraken under the radar since 2019 and is also imposing a fine on the exchange, according to the news put out by NYTimes. Kraken would be one of the largest firms to face such scrutiny from the department, according to the O.F.A.C sanctions against Iran.
Prevouusly, Kraken had met investigations and penalties. Jesse Powell’s exchange was imposed a $1.25 million fine by the CFTC in September 2021 for failing to register as required and for illegally offering digital asset trading.
The scrutiny of the exchange began in November 2019 when a finance department ex-employee called Nathan Peter Runyon accused the exchange of illegally generating revenue from countries that fall under US sanctions. OFAC began looking into the matter deeply regarding the user accounts based in Iran and also Syria and Cuba, which fall under the sanctions.
According to Powell, a spreadsheet that was circulated on the company’s official Slack channel also reveals that Kraken has 1,522 users in Iran, 149 in Syria, and 83 in Cuba.
“The company does not comment on specific discussions with regulators,” said Marco Santori, Kraken’s chief legal officer. In his words, Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues.
Lately, the scrutiny on crypto firms has seen a visible increase since the Terra ecosystem’s demise. Authorities are looking at probable regulatory violations and other misconduct by crypto firms to ensure that the firms are held liable for their inefficiency. The exchange has yet to provide any details regarding the matter.