On Tuesday, a newly published report said cryptocurrency exchange Kraken is under a federal investigation for allegedly violating US sanctions, according to five people familiar with the matter. Anonymous sources explained that the investigation into Kraken began in 2019 and was accused of allowing users from sanctioned countries such as Iran to access the cryptocurrency exchange.
The Treasury Department’s Office of Foreign Assets Control is allegedly investigating the Kraken case
San Francisco-based cryptocurrency exchange Legendary sea monster It is allegedly under investigation by the US Treasury’s Office of Foreign Assets Control (OFAC), according to a Report Published by New York Times (NYT) on July 26, 2022. Founded in July 2011 by Jesse Powell, Kraken is one of the oldest cryptocurrency exchange platforms in the world.
The New York Times report cites “five people affiliated with the company or with knowledge of the investigation.” Moreover, the report also says that the anonymous sources did not want to reveal their names “for fear of company retaliation.” According to the editorial summary, OFAC has been investigating Kraken since 2019 for allowing users from sanctioned countries to obtain crypto assets.
The five people familiar with the matter related to Kraken say they expect the US government to impose a fine on the exchange in San Francisco. Kraken was fined last year when the US Commodity Futures Trading Commission (CFTC) charged the company for “unlawfully offering retail margin commodity transactions in digital assets”.
At the time, the CFTC raised $1.25 million from the parent company of San Francisco crypto company Payward Ventures Inc. and asked Kraken to “stop and stop further violations”. Kraken was contacted by The New York Times, and the company’s legal director, Marco Santori, noted that the exchange “does not comment on specific discussions with regulators.” Santori also said:
Kraken closely monitors compliance with sanctions laws and, in general, reports to regulators even potential problems.
Speaking with a US Treasury spokeswoman, New York Times reporters said that OFAC issued a similar statement. “[The U.S. Treasury] Neither confirm nor comment on potential or ongoing investigations,” the individual from the Treasury said. People familiar with the matter said the OFAC investigation began in 2019 when a former employee initiated legal proceedings against Kraken and later resolved the case.
Anonymous sources in the New York Times report that OFAC began looking into Kraken’s accounts around the same time and that the accounts are allegedly from Iran, Syria and Cuba. The accusations that Kraken are under a federal investigation follow the latest report from Bloomberg that says the US Securities and Exchange Commission (SEC) is investigating Coinbase for alleged unregistered securities violations.
Bloomberg’s Coinbase report is similar to a New York Times editorial on Kraken where it cites anonymous people familiar with the matter. The two news publications have cited people familiar with the matter on various occasions in recent times, more specifically, stories regarding bankrupt crypto lender Celsius.
What do you think of Kraken’s report that the exchange is under federal investigation? Tell us what you think about it in the comments section below.
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