The Newyork Times reported that Kraken would allow Iranian users access to the platform.
What are U.S. sanctions?
Sanctions generally ban all trade with a particular country or region. Currently, the United States maintains comprehensive sanctions against Cuba, Iran, North Korea, Syria, and the Ukrainian region of Crimea. The United States also maintains significant sanctions programs against Russia and Venezuela.
According to a New York Times article, Kraken a cryptocurrency exchange platform is under investigation by the U.S. Treasury Department on suspicion of allowing Iranian users to use the site’s services in violation of federal sanctions against Iran. If found guilty of violating sanctions, Kraken could face significant fines.
Kraken currently sent CoinDesk a statement from Chief Legal Officer Marco Santori saying that the exchange will not comment on “specific discussions with regulators.”“Kraken has robust compliance measures in place and continues to grow its compliance team to match the growth of its business. Kraken closely monitors compliance with sanctions laws and generally reports potential problems to regulators as well,” Santori said.
The U.S. government has long imposed sanctions on individuals and nations to prevent them from accessing the global financial system. because of these sanctions, several cryptocurrency users and addresses in Iran have been targeted in the past.
Several cryptocurrency platforms have taken steps to prevent Iranian users from accessing their services. OpenSea blocked Iranian users earlier this year, while ConsenSys, an Ethereum incubator, made the same decision against some Iranian students Dcuring a coding course in 2021 taught by ConsenSys.
In addition, the Treasury Department has taken action in the past against cryptocurrency companies such as BitGo, an exchange, and BitPay, a cryptocurrency payments processor, both of which were fined for alleged sanctions violations.
Kraken CEO and co-founder Jesse Powell said he is willing to challenge regulations he considers unfair, including international sanctions.
Kraken CEO Jesse Powell responded to calls to freeze the accounts of Kraken’s Russian users by tweeting:“Our mission at Kraken is to get individual human beings out of the mainstream financial system and into the world of cryptocurrency, where arbitrary lines on maps no longer matter, where they don’t have to worry about being caught up in broad, indiscriminate wealth confiscation.”
In a corporate culture memo released in June, Kraken also stressed his belief that “weaponization of the financial system is immoral” and promised to “engage in litigation with government agencies where outdated laws are unfairly exclusionary.”