Kraken Exchange Settles with U.S. Treasury over Iran Sanctions Violations Quarrel

The US Treasury Department’s Office of Foreign Assets Control (OFAC) said Monday that it has struck an agreement with crypto exchange Kraken over serving customers in Iran.

Kraken will pay an amount of $362,159 in settlement of potential legal responsibility for apparent breaches of Iran sanctions. Kraken also committed to spend $100,000 to put extra sanctions compliance mechanisms in place.

OFAC claims that Kraken failed to deploy proper geolocation measures, such as an automatic internet protocol (IP) address blocking mechanism, allowing consumers in Iran to transact on Kraken’s platform.

We reported in July that Kraken was the subject of an ongoing federal investigation for allegedly violating U.S. sanctions on Iran.  After the U.S. embassy in Tehran was taken hostage in 1979, the U.S. restricted its activities with Iran and as a result, US companies are not allowed to buy or sell goods to people in the Middle East.

Commenting on the deal, Kraken’s Legal Head, Marco Santori, said to be pleased to have resolved the matter in a satisfying manner and stressed that the exchange had already strengthened its compliance controls.