Crypto exchange Kraken will pay $362,000 to the Treasury Department to settle potential civil liability for sanctions violations regarding transactions in Iran, the Office of Foreign Assets Control (OFAC) announced Monday.
The penalty could have been far greater — a maximum of $272 million. But because Kraken self-reported the sanctions violations, OFAC considered it a “non-egregious case.”
Kraken processed 826 transactions amounting to approximately $1.7 million on behalf of individuals located in Iran between October 2015 and June 2019, according to OFAC. The U.S. has had sanctions in place prohibiting the export of goods and services to Iran since 1979.
“Although Kraken maintained controls intended to prevent users from initially opening an account while in a jurisdiction subject to sanctions, at the time of the apparent violations, Kraken did not implement [internet protocol] address blocking on transactional activity across its platform,” the Treasury office said in its statement. “According to IP address data, account holders who established their accounts outside of sanctioned jurisdictions appear to have accessed their accounts and transacted on Kraken’s platform from a sanctioned jurisdiction.”
Kraken is “pleased to have resolved this matter,” Marco Santori, the company’s chief legal officer, said in a prepared statement.
“Even before entering into this resolution, Kraken had taken a series of steps to bolster our compliance measures,” Santori said. “This includes further strengthening control systems, expanding our compliance team and enhancing training and accountability.”
As part of its settlement with OFAC, Kraken will invest an additional $100,000 in “certain sanctions compliance controls.”
