Wednesday, May 31, 2023

OFAC Imposes $7.6 Million Fine on Poloniex For Violating Sanctions

  • The U.S. Department of Treasury’s OFAC has imposed a $7.59 million penalty on crypto exchange Poloniex.
  • Poloniex has agreed to pay the multi-million-dollar penalty to settle the violation charges.
  • OFAC alleged that Poloniex violated multiple sanctions programs by allowing customers from sanctioned regions to trade.

The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has levied a $7.59 penalty on California-based crypto exchange Poloniex. The crypto exchange has agreed to pay the amount in order to settle the charges related to the alleged violation of multiple sanctions programs.

As per a press release from the Office of Foreign Assets Control (OFAC), the multi-million dollar penalty is part of a settlement agreement that will clear Poloniex of any potential civil liability associated with the violations that allegedly occurred over the past decade.

The Treasury Department’s OFAC alleged that between January 2014 and November 2019, Poloniex allowed customers from sanctioned jurisdictions including Crimea, Cuba, Iran, Sudan, and Syria, to engage in online digital asset-related transactions on its platform. Users were allegedly allowed to trade, deposit, and withdraw a combined sum of $15.3 million.

OFAC accused the crypto exchange of offering services to customers from sanctioned regions, despite having sufficient data of their location from know-your-customer (KYC) formalities and internet protocol (IP) address data. The exchange was also accused of failing to screen existing customers to identify users from sanctioned jurisdictions.

However, Poloniex reportedly took corrective action and started implementing a block on IP addresses from sanctioned regions starting in June 2017. In fact, the crypto exchange implemented a sanctions compliance program in May 2015, which required a review of KYC information for new customers in jurisdictions subject to OFAC sanctions.

OFAC revealed that as per its Economic Sanctions Enforcement Guidelines, the penalty on the exchange would be more than $99 million. “The settlement amount reflects OFAC’s determination that Poloniex’s apparent violations were not voluntarily self-disclosed and were not egregious,” the agency added.

  • The U.S. Department of Treasury’s OFAC has imposed a $7.59 million penalty on crypto exchange Poloniex.
  • Poloniex has agreed to pay the multi-million-dollar penalty to settle the violation charges.
  • OFAC alleged that Poloniex violated multiple sanctions programs by allowing customers from sanctioned regions to trade.

The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has levied a $7.59 penalty on California-based crypto exchange Poloniex. The crypto exchange has agreed to pay the amount in order to settle the charges related to the alleged violation of multiple sanctions programs.

As per a press release from the Office of Foreign Assets Control (OFAC), the multi-million dollar penalty is part of a settlement agreement that will clear Poloniex of any potential civil liability associated with the violations that allegedly occurred over the past decade.

The Treasury Department’s OFAC alleged that between January 2014 and November 2019, Poloniex allowed customers from sanctioned jurisdictions including Crimea, Cuba, Iran, Sudan, and Syria, to engage in online digital asset-related transactions on its platform. Users were allegedly allowed to trade, deposit, and withdraw a combined sum of $15.3 million.

OFAC accused the crypto exchange of offering services to customers from sanctioned regions, despite having sufficient data of their location from know-your-customer (KYC) formalities and internet protocol (IP) address data. The exchange was also accused of failing to screen existing customers to identify users from sanctioned jurisdictions.

However, Poloniex reportedly took corrective action and started implementing a block on IP addresses from sanctioned regions starting in June 2017. In fact, the crypto exchange implemented a sanctions compliance program in May 2015, which required a review of KYC information for new customers in jurisdictions subject to OFAC sanctions.

OFAC revealed that as per its Economic Sanctions Enforcement Guidelines, the penalty on the exchange would be more than $99 million. “The settlement amount reflects OFAC’s determination that Poloniex’s apparent violations were not voluntarily self-disclosed and were not egregious,” the agency added.