OFAC settlement from Poloniex – OFAC said that Boston-based cryptocurrency exchange, Poloniex allowed users in sanctioned countries such as Crimea, Cuba, Iran, Sudan, and Syria to conduct crypto transactions between 2014 and 2019.
In a notice issued on May 1, The United States Treasury Department’s Office of Foreign Asset Control (OFAC) announced that it has come to a settlement agreement with Poloniex for $ 7.6 million.
According to the notice, the settlement is for over 65,000 “apparent violations” of sanction laws. Moreover, OFAC said the money would be used to settle Poloniex’s case for violating United States sanction programs against Crimea, Cuba, Iran, Sudan, and Syria. It further pointed out that Poloniex allowed its customers in the listed countries to trade more than $15 million in digital assets.
OFAC determined the settlement amount on the grounds that the violations were not “not voluntarily self-disclosed” nor “egregious.” Between January 2014 and November 2019, Poloniex allowed users in the sanctioned countries to carry out about 66,000 transactions that total more than $15.3 million. The notice said,
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“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.”
Furthermore, OFAC asserted that Poloniex did not block prohibited IP addresses from sanctioned jurisdictions given that it had sufficient KYC (Know Your Customer) information to know that it had users from those regions. Poloniex only started blocking IP addresses in 2017 when in fact it did start collecting KYC information in 2015.
OFAC acknowledged that the brief acquisition of Poloniex by Circle between February 2018 and 2019 “further improved” the firm’s compliance measures.
“Poloniex and Circle provided substantial cooperation in connection with OFAC’s investigation into the Apparent Violations.”
Poloniex Regulations Violation History
OFAC settlement with Poloniex is not the first time the company has been targeted for violating regulations. In May 2021, OSC (Ontario Securities Commission) also took measures against Poloniex for violations.
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Similarly, in August 2021, the exchange company settled with the SEC for $10.4 million after it was found to operate an “unregistered digital currency exchange.”
In the face of all this, Poloniex still maintains a moderately high volume. Over the last 24 hours, the exchange handled over $59 million in transactions. Also, in recent months, Poloniex added new trading features to its platform.
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Victor Swaezy
Victor Nnamdi Igbor "Swaezy" is a crypto enthusiast and writer with over 8 experience in blogging. He is an easy person and when not working, loves to have a good time.