Poloniex will pay $7.6M settlement to US authorities for ‘apparent violations’ of sanctions

OFAC said Poloniex allowed users in Crimea, Cuba, Iran, Sudan and Syria to conduct digital asset trades, deposits and withdrawals between January 2014 and November 2019.

The United States Treasury Department’s Office of Foreign Asset Control (OFAC) announced cryptocurrency exchange Poloniex has agreed to a $7.6 million settlement related to more than 65,000 apparent violations of multiple sanctions programs.

In a May 1 notice, OFAC said the $7.6 million would be used to settle Poloniex’s civil case for alleged violations of U.S. sanctions against Crimea, Cuba, Iran, Sudan and Syria. According to the government department, Poloniex allowed users in the sanctioned jurisdictions to conduct more than $15 million worth of digital asset trades, deposits and withdrawals between January 2014 and November 2019.

According to OFAC, Poloniex did not retroactively screen users who had registered at the exchange between when it launched in January 2014 and once it established a sanctions compliance program in May 2015, leading to the apparent violations. It said Poloniex’s violations were not “voluntarily self-disclosed” nor “egregious.”

“Although Poloniex made efforts to identify and restrict accounts with a nexus to Iran, Cuba, Sudan, Crimea, and Syria pursuant to its compliance program, certain customers apparently located in these jurisdictions continued to use Poloniex’s platform to engage in online digital asset-related transactions,” said the notice.

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Stablecoin issuer Circle acquired Poloniex in 2018, after which time, OFAC’s investigation concluded, the firm’s compliance measures “further improved,” specifically by closing accounts with IP addresses operating in Crimea. A group of investors, which included Tron founder Justin Sun, purchased the firm from Circle in 2019.

“Poloniex and Circle provided substantial cooperation in connection with OFAC’s investigation into the Apparent Violations.”

Crypto exchange Kraken agreed to a $362,000 settlement with OFAC in November 2022 related to similar apparent sanctions violations in Iran. Cointelegraph reached out to Poloniex but did not receive a response at the time of publication.

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