The New York Times highlighted that Kraken is under investigation for allowing users in punished nations to acquire and sell cryptocurrencies. Five individuals linked to the entity and with knowledge of the inspection got cited. Authorities have become increasingly impatient with preventing crypto from being a tool to circumvent financial sanctions.
The New York Times highlighted that Kraken is under the radar of the United States Treasury Office of Foreign Assets Control for violating financial punishments. The department is figuring out whether users in sanctions-hit nations are allowed to purchase and sell crypto assets.
The Kraken exchange has come under the magnifying glass of the United States Treasury Office of Foreign Assets Control for disobeying the international sanctions imposed in various countries worldwide. The Treasury is currently determining whether Kraken allowed customers in sanctions-hit nations to acquire and sell digital currencies, according to various sources in the New York Times on July 26. Neither Kraken nor the Treasury has spoken out about the investigation.
The inspection started in 2019, and the New York Times spoke about five people linked to the entity or with knowledge of the procedure. These individuals explained that the U.S. government might apply a fine on the entity, which got already confronted by other regulatory entities in the region. The U.S. Commodity Futures Trading Commission (CFTC) issued accusations against the entity in 2021, imposing a $1.25 million fine.
The Treasury is studying if the exchange made possible the trading of assets in profiles located in Iran, Syria, and Cuba. A former employee allegedly highlighted that Kraken made profits from customers in the said countries.
The report also highlights that more than 1,500 users got detected in Iran, 149 users in Syria, and at least 83 in Cuba. The investigation accentuates the efforts made by the authorities to impose control over the crypto market.
Crypto is Under the Magnifying Glass for its Use in Sanctioned Nations
Lawmakers expressed their worries about the role of digital assets in the circumvention of international sanctions imposed in various countries amid the war. Authorities have noted that crypto hinders the effects of these financial punishments, leading to increased scrutiny.
These departments have warned crypto exchanges not to allow their services to work with sanctioned nations, including Russia. Some have complied, like Binance, which closed multiple accounts connected to senior Russian officials. Other entities had shown more resistance to joining the cause, with Kraken announcing in March 2022 that it would not impose prohibitions on unsanctioned users.
North Korea and its accusations of hacking crypto entities have also captured the interest of government entities, including the U.S. Treasury. The department punished 3 ETH addresses allegedly connected to North Korea in April 2022.
EU Accelerated the regulation
The United States of America is not the only area to put a stop to crypto space. The European Union (EU) has also made various efforts to prevent illegal behavior and ensure investors’ safety.
EU member states that the nation finalized the extensive regulation procedures for the crypto space in July 2022. As a result, many crypto entities started declaring their status and current behavior in the region.
By: Jenson Nuñez
