Kraken, one of the leading cryptocurrency exchanges in the US by trading volumes, is under investigation. The investigations being conducted by the US Treasury Department have been launched over Kraken’s alleged violation of sanctions imposed against Iran.
US Treasury investigates Kraken
The US Treasury Department also plans to impose a fine against the exchange. A report by the New York Times said that the investigation into Kraken was ignited by five people who had close ties to Kraken, with each one of them choosing to remain anonymous for fear of retaliation from the company.
The investigation in question has been carried out since 2019, and it will make Kraken the leading cryptocurrency exchange to be probed by OFAC enforcement action. The probe will focus on whether Kraken violated the sanctions imposed against Iran.
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The trade restrictions against Iran were implemented in 1979, with the US banning the export of goods and services from the US to Iran. A spokesperson from the Treasury also said that the agency would not comment on any ongoing investigations.
The Chief Legal Officer at Kraken, Macro Santori, also said that the company does not reveal any specific discussions it has with regulators. Santori also said that Kraken was closely monitoring its compliance with sanctions laws and reported to regulators in case of any issue.
A recent report says that the CEO of Kraken, Jerome Powell, shared messages in 2019 hinting that the company was open to breaking the law if it benefited the company more than the costs of such action.
In March this year, Powell rejected a request by Ukraine’s Deputy Prime Minister to halt services in Russia. In the Twitter thread, Powell also said that the company wanted to bring everyone into crypto, where cross-border transactions were easy and possible.
Powell was also vocal in criticizing the move made by the Canadian government to impose sanctions against the Freedom Convoy protestors earlier this year. He was investigated by Canadian authorities for promoting self-custodial wallets.
Sanctions and the crypto sector
Regulators worldwide have scrutinized the crypto industry and its role in helping people avoid sanctions. Earlier this year, the International Monetary Fund (IMF) warned that Russia could use Bitcoin miners to avoid sanctions.
However, the CEO of Binance, Changpeng Zhao, has denied that a crypto is an ideal tool for escaping sanctions. Zhao said that crypto assets were easily traceable, and governments were improving at tracking these transactions.
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