Treasury Department Investigates Kraken Over Sanction Violation 

UTC by Ibukun Ogundare · 3 min read
Treasury Department Investigates Kraken Over Sanction Violation 
Photo: Depositphotos

Kraken said its culture sees the weaponization of the financial system as immoral. The company also noted it would disagree with government agencies regarding outdated laws that are unfairly exclusionary. 

US-based crypto firm Kraken is reportedly under investigation by the Office of Foreign Assets Control of the US Treasury Department. The New York Times said in a report that the crypto exchange allegedly violated US sanctions against Iran. The allegation against Kraken is that the company allowed Iranian users to use its site services, despite economic sanctions. About five anonymous sources confirmed that the company is believed to have allowed users in Iran and elsewhere to buy and sell digital tokens.

Kraken Under Investigation by Treasury Department

Notably, the US has imposed sanctions against Iran since 1979. The sanctions forbid any US-based business from buying or selling goods to any entity in Iran. The sources said the Treasury Department has been investigating Kraken since 2019 and may impose a fine. Also, the exchange is about to be the largest crypto firm in the US that will face enforcement action from the sanctions. The US government uses sanctions to limit countries from accessing the global financial system. Not commenting specifically on the alleged investigations into Kraken, a spokesperson from the Treasury Department said the agency uses all its tools and authorities to enforce the sanctions that protect US national security. Meanwhile, the Times views a Kraken spreadsheet that reveals that the crypto company has over 1,500 users that reside in Iran.

Kraken Chief Legal Officer Marco Santori talked about the company’s compliance. Noting that the company does not comment on certain discussions with regulators, he said:

Kraken has robust compliance measures in place and continues to grow its compliance team to match its business growth. Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues.”

Kraken’s Stance on “Unfair” Regulations

Over time, Kraken CEO Jesse Powell has been vocal about challenging regulations he perceives as unfair. According to an internal conversation about employee benefits in 2019, the CEO suggested the possibility of him breaking specific laws. Powell said he would be willing to violate regulations if the benefits to the company exceed the potential penalty. Before the Treasury Department investigation into Kraken came to light, the crypto firm had been ignoring calls to freeze accounts of Russian users. Instead, the CEO said in a tweet:

“Our mission at [Kraken] is to bridge individual humans out of the legacy financial system and bring them into the world of crypto, where arbitrary lines on maps no longer matter, where they don’t have to worry about being caught in broad, indiscriminate wealth confiscation.”

In a more recent memo, Kraken said its culture sees the weaponization of the financial system as immoral. The company also said it would disagree with government agencies regarding outdated laws that are unfairly exclusionary.

Blockchain News, Cryptocurrency news, News
Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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