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Kraken Settle Downs the Tussle with the OFAC

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One of the leading US crypto exchanges Kraken is reported to face another regulatory action. The struggle of crypto exchange with the Office of Foreign Assets Control of the United States Treasury Department reported to come to the settlement. Crypto exchange would pay more than 360,000 USD as civil liability and additional 100,000 USD as fine. 

Kraken was alleged by the US authority of violating the sanctions against Iran and several other countries. The crypto exchange was said to operate within these regions despite the sanctions. Avoiding any possibility of any legal action or restriction, the crypto firm agreed to settle down the issue and pay a fine for it. 

OFAC initiated the investigation on California based crypto exchange in July this year. 

Kraken was reported to have over 1,500 crypto users in Iran using the crypto exchange’s platform. Moreover, 149 users were from Syria and 83 users were from Cuba using the crypto exchange. These were the number of crypto users by June 2022. All these countries are under the sanctioned countries list by the United States. 

The United States has had no diplomatic relations with Iran since 1979. Moreover, there are sanctions from the former on the latter forbidding the goods and services from being exported. even the businesses and individuals are abided by these sanctions. In addition to Iran, Cuba and Syria are under the same list of countries facing sanctions from the US. 

Given these restrictions, these countries are not eligible to do businesses with the entities belonging to the US. Those who violate the regulation are liable to face the strict actions, like Kraken is subjected to pay the penalties. 

The New York Times reported given the statements from five people having knowledge of the case. Inquiry over the crypto firm was started in 2019 itself. They also confirmed the government might have intended to put up a fine on the company. It’s noteworthy that the crypto firm has a history of tussling with regulatory authorities.

On 28th November, Kraken was reported to settle with OFAC. The crypto exchange would have to pay about 362,158 USD in order to settle the issue of civil liability in the wake of clear violations of Iranian sanctions. The crypto firm also agreed to pay an additional 100,000 USD which will be allocated to sanctions compliance control activities. 

In September 2021, Kraken also had to face allegations of illegal financial offerings. The company had paid up to 1.25 million USD in fine while settling out the issue. 

Nancy J. Allen

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