The U.S. Treasury Department’s Office of Foreign Assets Control is reportedly investigating cryptocurrency exchange Kraken for allegedly violating Iran’s economic sanctions, according to the New York Times.
Kraken is said to have broken company rules by allowing customers from Iran and other sanctioned countries to use its exchange, according to five persons “associated with the firm or with knowledge of the inquiry” cited by the New York Times. The sources sought anonymity out of fear of retaliation, according to the story.
Since 1979, the United States has maintained its economic sanctions against Iran, prohibiting any American-based companies from doing business with individuals or organizations inside the country.
In an email to Decrypt, Kraken’s chief legal officer Marco Santori stated that the company “does not comment on particular interactions with regulators.”
“Kraken has strong compliance controls in place, and it keeps expanding its compliance staff to keep up with the expansion of its business. According to Santori, Kraken “closely checks compliance with sanctions legislation and, generally speaking, communicates to regulators even possible difficulties.
While Kraken may be under investigation for allegedly breaking American sanctions, OpenSea earlier this year angered some users by making a point of carrying out American penalties on Iran. A handful of Iranian traders who either claimed to have previously resided in Iran or who really lived there were barred from the New York-based NFT marketplace back in March.
As of September, Kraken was hit with a $1.25 million fine by the U.S. Commodity Futures Trading Commission (CFTC) for listing “illegal off-exchange digital asset trading and failing to register as required.”
The business has been dealing with an internal cultural conflict in the meanwhile. Kraken CEO Jesse Powell said “triggered” staff should quit last month as part of his renewed efforts to guarantee that his exchange remained a “freedom enterprise.”