Kraken Exchange Under Investigation | Moni Talks

Kraken exchange, one of the world’s largest cryptocurrency exchanges, is under federal investigation for allegedly breaching United States sanctions by enabling customers in Iran and beyond to purchase and sell digital tokens.

Kraken, an $11 billion private entity that allows customers to purchase, trade, or hold multiple cryptocurrencies, has previously faced regulatory action. The Commodity Futures Trading Commission fined the corporation $1.25 million last year for unlawful trading services.

The cryptocurrency firm would be the largest US crypto business to face OFAC enforcement action. Sanctions on Iran, enacted by the US in 1979, ban the export of goods or services to people or companies in the country.

As the market for digital currencies has risen, the federal government has progressively clamped down on crypto firms. Tether, a stablecoin corporation, was penalised by the CFTC last year for false representations regarding its reserves. Simultaneously, the Justice Department charged an ex-employee of Coinbase, the largest cryptocurrency exchange in the US, with insider trading earlier this month.

Lawsuit Accused Business in 2019

The Kraken exchange and the subject of sanctions came up in a November 2019 lawsuit filed by a former finance department employee who accused the business of earning money from accounts in sanctioned nations.

Jesse Powell, Kraken’s exchange CEO, allegedly stated that he would contemplate breaching the law in various instances if the benefits to the firm exceeded the possible fines.

However, it is believed Powell stated that the Kraken exchange regularly checks compliance with sanctions laws and, as a general rule, communicates to regulators even possible problems.

That same year, OFAC began looking into the Kraken exchange, concentrating on the company’s accounts in Iran. Sources alleged Kraken users had also created accounts in Syria and Cuba.

A lawyer from a renowned law firm that handles crypto regulations believes that as crypto moves without a bank or intermediaries, exchanges are liable for certain forms of financial regulatory compliance.