Kraken, one of the "cleanest" exchanges, is suspected of aiding Iranian users to use its exchange despite federal sanctions.
The US Treasury Department's Office of Foreign Assets Control (OFAC) is investigating the exchange crypto Kraken for allegedly violating economic sanctions against Iran as well as Syria and Cuba, according to New York Times.
Kraken, one of the world's largest crypto exchanges, is under investigation by the US Treasury Department for potentially violating sanctions by allowing accounts in Iran and other countries to buy and sell crypto. Latest w/ @yaffebellany: https://t.co/BixJm2lm9g— Ryan Mac (@RMac18) July 26, 2022
According to the report, the number of Kraken users residing in Iran is 1,500. OFAC has been keeping an eye on this exchange since 2019 and the fine is only a matter of time.
The US has maintained economic sanctions against Iran since 1979, banning the export of goods or services to businesses and individuals in the country. However, according to insiders, Kraken CEO Jesse Powell is willing to break the law if the company's benefits outweigh the costs.
Kraken's legal director Marco Santori said:
“Kraken is yet to comment on negotiations with regulators. Kraken has adhered to strict regulations and developed the team in line with the growth of the enterprise business. Kraken complies with sanctions as a matter of general and is always ready to report to the regulator when there is a problem.”
At the same time, former Kraken employee Nathan Peter Runyon filed a lawsuit against the company for practicing unethical and illegal business tactics, misleading employees about stock options, and violating sanctions. .
This is not the first time the Kraken CEO has advocated the notion that "trade is borderless". In March, Powell refused a request from the Deputy Prime Minister of Ukraine to stop serving Russian customers.
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.— Jesse Powell (@jespow) February 28, 2022
Russians should be aware that such a requirement could be imminent. #NYKNYC https://t.co/bMRrJzgF8N
Sanctions are a powerful tool to help the US increase its influence over hostile countries. Song, cryptocurrency are affecting this measure because crypto does not operate in the traditional banking system making it difficult for the government to control.
Back in September 2021, the US Commodity Futures Trading Commission (CFTC) fined Kraken $1.25 million for providing the products cryptocurrency illegal escrow without registering with the agency. In the wave of layoffs covering the market, this North American exchange still announced that it needs to recruit 500 more positions in the near future.
Also in related developments, recently Binance has also faced a lot of evidence accusing the floor of bypassing the US, operating underground in Iran. Even the world's largest crypto exchange suggests how to use a VPN to bypass the surveillance agency. Song, CEO Binance was Changpeng Zhao who immediately responded afterwards.