Digital Currency Exchange Kraken Under Investigation for Violating OFAC Sanctions – Bitcoin News

According to five sources familiar with this matter, Tuesday’s newly released report details the federal investigation into Kraken cryptocurrency exchange for violating U.S. Sanctions. The unknown sources explained that the inquiry into Kraken started in 2019, and it’s accused of allowing users from sanctioned countries like Iran access to the digital currency trading platform.

Treasury’s Office of Foreign Assets Control Is Allegedly Investigating Kraken

The San Francisco-based crypto exchange Kraken is allegedly under investigation by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), according to a report published by the New York Times (NYT) on July 26, 2022. Jesse Powell founded Kraken in July 2011. It is among the most established digital currency exchanges around the globe.

The NYT report cites “five people affiliated with the company or with knowledge of the inquiry.” Furthermore, the report also says the anonymous sources did not want to be named “for fear of retribution from the company.” According to the editorial’s summary, OFAC has been investigating Kraken since 2019 for allowing users from sanctioned countries to acquire crypto assets.

According to five sources familiar with Kraken’s situation, they anticipate the U.S. government to issue a sanction against San Francisco’s trading platform. Kraken got hit with a fine last year when U.S. ​​Commodity Futures Trading Commission (CFTC) charged the firm for “illegally offering margined retail commodity transactions in digital assets.”

At that time, the CFTC levied $1.25 million from the San Francisco crypto company’s parent firm Payward Ventures Inc., and told Kraken to “cease and desist from further violations.” The NYT reached out to Kraken and the company’s chief legal officer, Marco Santori, noted that the exchange “does not comment on specific discussions with regulators.” Santori further said:

Kraken monitors the compliance of sanctions laws closely and reports any potential problems to regulators.

According to a U.S Treasury spokesperson, the NYT journalists said OFAC had made similar statements. “[The U.S. Treasury] does not confirm or comment on potential or ongoing investigations,” the individual from the Treasury said. According to people who are familiar with this matter, the OFAC investigation began in 2019, when Kraken was accused of launching legal proceedings. The case was eventually settled.

NYT’s anonymous sources note that OFAC started looking into Kraken accounts around that same time and the accounts allegedly stemmed from Iran, Syria, and Cuba. According to Bloomberg, the U.S. Securities and Exchange Commission is reportedly investigating Coinbase for alleged securities violations.

Bloomberg’s report concerning Coinbase is similar to the New York Times editorial on Kraken as it cites unnamed people familiar with the matter. Both publications have quoted people who are familiar with the issue on a variety of occasions, especially stories about Celsius the bankrupt cryptocurrency lender Celsius.

This story contains tags
Anonymous sources: CFTC Fine and Coinbase. Crypto exchanges include cuba and Digital Currency. Investigations by Iran, Jesse Powell. Kraken Sanctions. Marco Santori. NYT Report. OFAC Sanctions. Regulations. Report on San Francisco Exchange. Sources. Treasury. US Treasury.

Do you agree with the Kraken Report that the exchange is being investigated by federal authorities? Please comment below to let us know your thoughts on this topic.

Jamie Redman

Jamie Redman is the News Lead for Bitcoin.com News. He also lives in Florida and works as a journalist covering financial technology. Redman is an active participant in the cryptocurrency community from 2011. Redman is passionate about Bitcoin and open-source codes. Redman has contributed more than 5700 articles to Bitcoin.com News since September 2015. These articles are about disruptive protocols that are emerging.




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