Poloniex settles sanctions violations allegations for $7.59m
Cryptocurrency exchange Poloniex has agreed to pay a $7.59 million settlement to the U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) in response to allegations of numerous sanctions violations.
Cryptocurrency trading platform Poloniex has agreed to pay a settlement of $7.59 million to the U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) following allegations of sanction violations, as disclosed by the regulatory agency on May 1.
The exchange, which has ties to Tron founder Justin Sun, was implicated in nearly 66,000 breaches of multiple sanctions programs, allowing customers from Crimea, Cuba, Iran, Sudan, and Syria to carry out trades amounting to approximately $15 million from January 2014 to November 2019.
Poloniex commenced operations in January 2014, but a sanctions compliance program was not established until May 2015.
Moreover, this program lacked retroactive application, enabling existing customers from sanctioned areas to maintain access to the platform.
Despite Poloniex’s attempts to detect and limit accounts associated with 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 American crypto company 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.
When determining the penalty’s severity, OFAC considered mitigating factors such as Poloniex’s small startup nature during most of the alleged violations and Circle’s initiative to enhance the sanctions compliance program while in control of the company.
The cooperation of both Circle and Poloniex with OFAC throughout the investigation also played a role in the reduced penalty imposed on the cryptocurrency exchange.
