Kraken Crypto Exchange: Why is US Treasury Investigating It?


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In Brief:

The US is inquiring into whether the Kraken cryptocurrency exchange permitted Iranian users to trade digital tokens in defiance of US sanctions, according to The New York Times.

The US Treasury Department is investigating whether allowing Iranian customers to trade digital currencies on the Kraken platform violated US economic restrictions, according to a story in the New York Times.

The US Commodity Futures Trading Commission (CFTC) fined Kraken $1.25 million for “illegal off-exchange digital asset trading and failing to register as required” in September of last year, prompting the Office of Foreign Asset Control of the Treasury Department to launch an investigation.

By enabling customers in Iran to buy and trade digital tokens, Kraken is allegedly breaking US sanctions, according to a Times investigation that cited persons familiar with the situation.

In response to hacking incidents and a declining cryptocurrency market, the US government has recently increased its oversight of crypto firms. The crypto market currently lacks a single governing authority.

A number of cryptocurrency companies recently stopped allowing withdrawals because of the steep decline in the value of digital assets. 

For example, Vauld ceased deposits, trading, and withdrawals on July 4. Vauld CEO Darshan Bathija claimed in a blog post that since June 12, 2022, there have been large customer withdrawals totaling over $197.7 million as a result of the present market conditions.

He added that although these companies can exist by selling their shares, the investor is left swinging in the wind when they fail.

As nations like Russia and Iran potentially escape international sanctions by changing their money into cryptocurrencies for transactions, the US is stepping up its attack on cryptocurrency companies. They direct money toward a tumbler service, which complicates the blockchain’s ability to trace the transactions.

However, Kraken’s chief legal officer, Marco Santori, stated, “Strong compliance controls are in place at Kraken, and the company is expanding its compliance staff to keep up with the expansion of its business. He continued by saying that Kraken closely checks adherence to sanctions legislation and, generally speaking, alerts regulators to any potential problems.”

Kraken has been resolving an internal issue in the meantime. “I think we’ve built some incredibly smart policies,” CEO Jesse Powell wrote in a tweet, “that might not appease woke activists but work for the other 99 percent of the world.”

The company requested that its employees respect the freedoms, privacy, and individual rights of others in a blog post. Kraken will continue to be a freedom firm. Crypto is a freedom movement.

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Mufasa is the lead writer at CryptoMufasa who likes to share all the latest info on the crypto world with you! Mufasa Enjoys enjoys a good read and recommendations so don't forget to comment on the posts and let him know.


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