Cryptocurrency exchange Poloniex has agreed to a $7.6 million settlement over more than 65,000 apparent violations of multiple sanctions programs, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) announced.
In a May 1 notice, OFAC said the $7.6 million will be used to resolve a civil case involving Poloniex's alleged violations of US sanctions on Crimea, Cuba, Iran, Sudan and Syria. Poloniex allowed users in sanctioned jurisdictions to trade, depo sit and withdraw digital assets worth more than $15 million between January 2014 and November 2019, according to the government department.
According to OFAC, Poloniex did not retrospectively screen users who registered with the exchange between its launch in January 2014 and the establishment of its sanctions compliance program in May 2015, resulting in apparent violations. It said Poloniex' s breach was not "voluntary self-disclosure" or "shocking." "Despite Poloniex's efforts to identify and restrict accounts with ties to Iran, Cuba, Sudan, Crimea, and Syria under its compliance program, certain customers apparently located in these jurisdictions continue to use Poloniex's platform to engage in online digital assets -related activity transactions," the notice said.
After stablecoin issuer Circle acquired Poloniex in 2018, OFAC's investigation concluded that the company's compliance measures had “further improved,” notably closing the accounts of IP addresses operating in Crimea. A group of investors including Tron founder Just in Sun bought the company from Circle in 2019 "Poloniex and Circle provided substantial cooperation with OFAC's investigation of the apparent violations." Cryptocurrency exchange Kraken agreed to a $362,000 settlement with OFAC in November 2022 over similar apparent sanctions violations by Iran.
