Cryptocurrency exchange Poloniex has agreed to pay a $7.59 million settlement to the US Treasury’s Office of Foreign Assets Control (OFAC) in response to allegations of numerous sanctions violations.
Cryptocurrency trading platform Poloniex has agreed to pay a $7.59 million settlement to the US Treasury’s Office of Foreign Assets Control (OFAC) after allegations of sanctions violations, the regulatory agency disclosed on May 1.
The exchange, which has ties to Tron founder Justin Sun, is implicated in nearly 66,000 violations of multiple sanctions programs, allowing clients from Crimea, Cuba, Iran, Sudan and Syria to execute trades worth approximately $15 million from January 2014 to November. 2019.
Poloniex started operations in January 2014, but the sanctions compliance program wasn’t established until May 2015.
Furthermore, this program lacked retroactive application, which would enable existing customers from sanctioned areas to maintain access to the platform.
Despite Poloniex’s attempts to detect and limit accounts linked to Iran, Cuba, Sudan, Crimea, and Syria, OFAC reported that some individuals in these regions continued to engage in digital asset transactions on the platform.
Currently, under the ownership of a group of entities, including Tron creator Justin Sun, Poloniex was briefly owned by US cryptocurrency firm Circle.
Last year, Poloniex and Crypto Exchange Huobi unveiled a “strategic partnership” focused on advancing the Huobi Token “ecosystem development”. Sun also holds an advisory role with Huobi.
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In determining the severity of the penalty, OFAC considered mitigating factors such as Poloniex’s small start-up nature during most of the alleged violations and Circle’s initiative to enhance its sanctions compliance program while controlling the company.
Circle and Poloniex’s cooperation with OFAC during the investigation also played a role in reducing the penalty imposed on the cryptocurrency exchange.