Crypto exchange Kraken investigated over suspicion of violating sanctions

Kraken, one of the largest crypto exchanges in the world, is being investigated by the U.S. Treasury Department for suspected sanctions violations, which included allowing Iranians and others to transact digital assets on its platform.

Kraken expected to pay fine

According to an article in the New York Times, the crypto exchange, headed up by CEO Jesse Powell, has been under investigation by the Treasury Department’s Office of Foreign Assets Control since 2019.

The company would be expected to pay a fine, and it would also be the largest U.S. crypto company to suffer an enforcement action from the Treasury agency for allegedly violating sanctions imposed upon Iran in 1979.

CEO Powell courts controversy

It’s not exactly been a case of happy families for Kraken and regulatory authorities. The CFTC slapped a $1.25 million fine on the company for operating a prohibited trading service just last year.

Also, back in 2019, CEO Jesse Powell was said to have considered breaking the law on a range of issues as long as the benefits outweighed the penalties. 

And then currently, Powell has courted plenty of controversy, both inside and outside the company, by offering to pay-off employees who were not happy with the company culture he had instilled, and then saying that he did not regret offending them.

A further contentious situation has also developed between Powell, and the U.S. authorities, when the CEO resisted having to freeze the accounts of all citizens from Russia. He complied with all requests to freeze the accounts of individuals who were blacklisted, but remarked that it would be unfair to make all Russian citizens an object of sanctions.

The New York Times reported that according to a spreadsheet, posted on a company-wide Slack channel, Kraken was still allowing exchange accounts to be used by citizens from Iran, Syria, and Cuba. The spreadsheet has since been taken off the channel.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.