July 27, 2022

Kraken, a U.S. Crypto Exchange, Is Suspected of Violating Sanctions

The U.S. Treasury Department is investigating a sanctions violation by cryptocurrency exchange Kraken. This is reported by journalists of The New York Times. They specified that the investigation has been underway since 2019. If the violation is proved, the company faces a hefty fine.

Authorities suspect the crypto exchange of serving customers from Iran, Cuba and Syria.

Journalists mentioned that last month, Fed Chairman Jerome Powell published a curious table in the messenger Slack. It was a collection of Kraken users by different regions. According to the table, the crypto-exchange serviced more than 1,500 accounts from sanctioned countries. Powell later deleted the post.

Sanctions have become a powerful tool in U.S. geopolitics. However, blockchain transactions allow bypassing the traditional banking system. As a result, the government essentially loses control of sanctions.

As the crypto market has grown, the U.S. has increased penalties against blockchain companies. Last year, for example, stabelcoin issuer Tether was fined for misrepresenting its reserves. Last week, prosecutors arrested a former Coinbase executive on insider trading charges. The U.S. is also investigating the bankruptcy of the Terra project.

Jack Evans

About the author

I became a crypto asset owner in 2014, when the industry was in its infancy. Before that, I was working in the classic US and European stock markets. Since then, I have gained extensive experience in both cryptocurrency investing and day trading. I am happy to share with readers my experience with crypto exchanges, DeFi and NFT instruments. 

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