Kraken can be under federal investigation for potential violation of U.S. sanctions against Iran, the New York Times reported. And they’re not the first one.
NYT says that it has found 5 people who know of the subject but do not want to be identified and claims that The U.S. Treasury Department's Office of Foreign Assets Control has been investigating crypto exchange Kraken since 2019 and now is expected to impose a fine.
<aside> đź’ˇ FYI: The United States has since 1979 applied various economic, trade, scientific and military sanctions against Iran in response to the Iranian nuclear program and Iranian support for terrorist organizations. In 2018, the United States reimposed sanctions that had been suspended three years earlier as part of Iran's nuclear deal with major world powers. Joe Biden said in 2021, that he will not lift economic sanctions against Iran until Iran complies with the terms of the 2015 JCPOA nuclear deal.
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Marco Santori, Kraken’s chief legal officer, said the company “does not comment on specific discussions with regulators.”
A Treasury representative said the agency “does not confirm or comment on potential or ongoing investigations”.
Kraken is not the first one in line. Earlier in July Reuters’ investigation revealed that Binance continued to service traders in Iran despite U.S. sanctions against Iran. Several traders have confirmed to Reuters that they could use the exchange easily without fulfilling KYC requirements.
"There were some alternatives, but none of them were as good as Binance," said Asal Alizade, a trader in Tehran who said she used the exchange for two years until September 2021. "It didn't need identity verification, so we all used it."
Since Binance is based in the Cayman Islands, it doesn’t have to comply with the sanctions, but other companies owned by CZ and registered in the US can suffer from secondary sanctions.
Violating sanctions (especially the ones that are supposed to contain the threat of nuclear weapons and terrorism) doesn’t sound nice. At the same time, a decentralised society is supposed to be free from politics, etc. What do you think, is it fair to fine DeFi companies and make them comply with sanctions? Should exchanges ban users from Iran or not?