US authorities suspect Kraken of sanctions violations, reports say

The U.S. Treasury’s Office of Foreign Assets Control could levy a penalty on the Kraken bitcoin exchange for violations of the sanctions regime. This was reported by The New York Times, citing knowledgeable sources.

The investigation has been underway since 2019.

The publication said that as part of internal communications, Kraken’s CEO Jesse Powell placed a spreadsheet of verified accounts of the exchange. It showed that the platform had 1,522 users in Iran, 149 in Syria and 83 in Cuba. The document was subsequently removed.

Kraken’s chief legal officer Marco Santori said that the company “does not comment on specific discussions with regulators.” He stressed that “the exchange closely monitors sanctions compliance and reports potential problems to authorities.”

In February 2022, Powell rejected a proposal to block all Russian users’ accounts without a legal mandate. He stressed his respect for the Ukrainian people but explained his stance with libertarian values.

1/6 I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.

Russians should be aware that such a requirement could be imminent. #NYKNYC https://t.co/bMRrJzgF8N

— Jesse Powell (@jespow) February 28, 2022

In April, the U.S. Treasury imposed sanctions on группы компаний BitRiver, занимающихся майнингом криптовалют в РФ, даркнет-маркетплейса Hydra и криптовалютной биржи Garantex.

Earlier Reuters reported that Binance continued to service clients in Iran, circumventing U.S. sanctions and the ban on doing business in that country.

In October 2021, the U.S. Treasury issued guidance on sanctions compliance by participants in the crypto industry.

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