thecoinrise.com
American cryptocurrency trading platform, Kraken is under investigation by the United States Treasury Department Office of Foreign Assets Control (OFAC) for allegedly permitting users from sanctioned countries to access the platform.
As reported by the New York Times which first broke the news, the exchange has been under investigation since 2019, and the likelihood of imposing a fine on the exchange is now very high.
According to a spreadsheet reportedly viewed by the Times, some of the Kraken users were from Iran, Cuba, and Syria respectively. Despite Iran being on the US sanctions list since 1979, the ongoing probe revealed that as many as 1,500 Kraken users have their residences listed in Iran.
“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.
It is unclear where the investigation will lead, and a Kraken spokesperson said the trading platform does not respond to ongoing discussions with regulators.
“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.
Exchanges and Regulatory Impasse
The cryptocurrency exchange business is a very delicate one, and per regulatory standings, many are often in the cross-hairs of market watchdogs across the board.
Besides the Kraken investigation, the Coinbase exchange is also likely to face a lawsuit from the Securities and Exchange Commission (SEC) as the platform was accused by the market watchdog of listing about 9 tokens that are deemed securities.
Other renowned trading platforms like Binance have also been placed on regulator’s radars around the world. This unending onslaught now accounts for why many trading platforms are doing all they can to gain licenses from authorities in several jurisdictions around the world.