The US Treasury Department has been investigating Kraken since 2019 and is expected to impose a fine on the cryptocurrency exchange, according to a New York Times report.
The firm may have violated US sanctions, according to the Times report, by allowing users in Iran, Cuba and Syria to buy and sell digital assets. The Treasury Department Office of Foreign Assets Control is handling the investigation. Kraken would be the largest American crypto firm to be hit by enforcement action by the office.
“Treasury does not confirm or comment on potential or ongoing investigations. We remain committed to using all of our tools and authorities to enforce the sanctions that protect US national security,” a Treasury spokesperson said in an email.
Kraken allegedly allowed users to operate accounts in Iran, as well as Syria and Cuba, which are under US sanctions, according to the Times. Sanctions against Iran have been in place since 1979. A Kraken spreadsheet viewed by the Times showed the firm had more than 1,500 users with residences in Iran.
“Kraken does not comment on specific discussions with regulators. Kraken has robust compliance measures in place and continues to grow its compliance team to match its business growth. Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues,” said Kraken Chief Legal Officer Marco Santori.
Kraken CEO Jesse Powell has been vocal about who is allowed to use the exchange. He resisted calls to freeze the accounts of Russian users in February, days after the country invaded Ukraine. The US has sanctioned some Russian businesses and individuals but has not forced crypto firms to drop the country.
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