The astonishing growth of the crypto market in recent years has forced the federal government to aggressively crack down on crypto firms, which are very weakly regulated.The absence of the traditional banking system, which makes it more difficult for the government to oversee the money, makes cryptocurrencies a danger to sanctions.
As per a New York Times report, Kraken, one of the leading crypto exchanges in the world, is being investigated by the federal government on July 26. The Fed suspects that the exchange assisted its Iranian users in violating US sanctions by allowing them to buy and sell digital tokens with users from other countries.
According to the sources, the Office of Foreign Assets Control of the Treasury Department has been looking into Kraken since 2019 and is anticipated to punish the company. Kraken, would be subject to O.F.A.C. enforcement action because of the 1979 U.S. sanctions against Iran, which forbade exporting goods or services to individuals or businesses there.
According to communications obtained by The New York Times, Jesse Powell, Kraken’s CEO, stated he would consider breaching the law in a variety of circumstances if the benefits to the firm exceeded potential fines in an internal discussion regarding employee benefits in 2019. In addition, Mr. Powell fostered internal conflict inside the organisation over matters of race and gender.
According to a spreadsheet that Mr. Powell shared to a company-wide Slack channel to demonstrate where the company’s clients were, as of last month, Kraken seemed to still be servicing accounts in nations under sanctions, such as Iran.
The spreadsheet indicated that Kraken had 1,522 members with addresses in Iran, 149 in Syria, and 83 in Cuba. Additionally, the corporation had more than 500,000 members in Britain and over 2.5 million users with residencies in the United States. The majority of staff were immediately denied access to the spreadsheet.