Kraken Settles with US Department of Treasury, Pays $362K Penalty

Crypto exchange Kraken has settled with the US Department of Treasury, which had alleged sanction violations. Falling under the Office of Foreign Assets Control (OFAC), Kraken has agreed to pay $362,158.70 to settle a possible civil liability for claimed violations of the Iranian Transactions and Sanctions Regulations.

According to the enforcement release, Kraken apparently failed to implement geolocation tools to block certain transactions, thus allowing transactions from Iran violating the terms of existing sanctions. The small amount of the penalty reflected OFACs opinion that the violations were “non-egregious and voluntarily self-disclosed.”

At the same time, Kraken and OFAC have agreed that Kraken will spend $100,000 to incorporate additional sanctions compliance controls.

While Kraken “failed to exercise due caution,” it has already taken “significant remedial measures.” This includes blocking specific geographies as well as working with a vendor to halt any transactions that may be deemed in transgression of rules. Kraken will also hire new staff, including a head of sanctions.

OFAC claims that between October 14, 2015, and June 29, 2019, Kraken processed 826 transactions totaling around $1,680,577.10, on behalf of individuals who appeared to have been located in Iran at the time of the transactions.

 

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