On Monday, the Treasury Department announced that Kraken, one of America's largest criptocurrency exchanges, has settled with the government and agreed to pay more than $360,000 for violating America's sanctions laws related to Iran.
The Delaware-based company failed to prevent more than 820 individuals from Iran from conducting more than 1.6 million transactions on its platform between October 2015 and June 2019, according to the Office of Foreign Assets Control OFAC OFAC, which found Kraken's conduct non-egregious and voluntarily self-disclosing, reducing the settlement it paid.
Under the agreement, the company will spend $100,000 on improving its sanctions compliance system, including by implementing an automated internet protocol address blocking system that would prevent users in Iran from accessing Kraken for transactions in the future.
Kraken applied its geolocation controls only at the time of the onboarding, and not with respect to subsequent transactional activity despite the fact that transactions appear to have been conducted from Iran, OFAC said.
The agency applauded Kraken for remedial changes like integrating geolocation blocking into its platform to prohibit Iranians from using Kraken, appointing a dedicated sanctions expert to staff, and also blocking accounts in Crimea, Donetsk and Luhansk in Ukraine.
In 2021, Kraken was fined $1.25 million for not registering as a futures commission merchant with the Commodity Futures Trading Commission and selling margined retail commodities illegally.