Poloniex Settles With OFAC for $7.6M Over Sanctions Violations

OFAC found that while Poloniex did not voluntarily disclose its apparent violations of sanctions programs, the infractions were not considered to be especially severe or harmful

article-image

jokerpro/Shutterstock modified by Blockworks

share

Crypto exchange Poloniex has agreed to pay over $7.5 million to settle charges related to tens of thousands of sanctions violations with the Office of Foreign Assets Control (OFAC). The violations are alleged to have occurred over a period of more than four years.

The Delaware-based company has agreed to pay more than $7,591,000 to settle its potential civil liability for 65,942 violations that occurred between September 2015 and November 2019.

OFAC accused Poloniex of allowing customers in sanctioned jurisdictions to engage in digital asset-related transactions, despite having reason to know their location through know-your-customer information and internet protocol address data. 

These transactions amounted to a combined value of $15.3 million across 232 customers from sanctioned jurisdictions including Cuba, Iran, Sudan, Syria and Crimea, according to a statement from the Treasury Department on Monday.

Poloniex later halted trading by US residents in November 2019 before being sold to Polo Digital Assets, an “Asian-backed” investment group that included the likes of Tron’s Justin Sun.

OFAC found that while Poloniex did not voluntarily disclose its apparent violations of sanctions programs, the violations were not considered to be especially severe or harmful.

Circle Internet Financial Limited acquired Poloniex in 2018 and implemented additional internal sanctions compliance controls that were found to have reduced the rate of violations. 

Certain violations persisted in the 12 months that followed, mainly the result of a small number of accounts opened by people located in Crimea, the US Treasury said.

The enforcement release describes the alleged violations in detail and highlights the significance of using all available location-related information to create a risk-based sanctions compliance program. 

This approach is essential to minimize the risk of offering services to individuals in sanctioned jurisdictions, the Treasury said.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png

Research

With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.

article-image

Launching cryptocurrencies the old fashioned way may soon make a return

article-image

Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug

article-image

NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.

article-image

EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down