OFAC alleges that Poloniex did not properly maintain know-your-customer practices between 2014 and 2019. Cryptocurrency exchange Poloniex has accepted a $7.6 million fine to settle sanctions violation charges.
Violation penalty from OFAC to the cryptocurrency exchange!
OFAC said the Justin Sun-affiliated platform had violated various enforcement programs approximately 66,000 times. Accordingly, he noted that it allowed customers from Crimea, Cuba, Iran, Sudan and Syria to collectively transact up to $15 million between January 2014 and November 2019.
Poloniex started operations in January 2014. However, it did not have a sanctions compliance program until May 2015. A Treasury document states that the compliance program is not retroactive. It is also stated to allow customers from already sanctioned jurisdictions to continue using the platform. The sanctions watchdog said on Monday that crypto exchange Poloniex will remit $7.59 million with the US Treasury Department’s Office of Foreign Asset Control (OFAC) to resolve allegations of sanctions violations.
What is behind the alleged violations?
OFAC said, “Although Poloniex makes efforts to identify and restrict accounts linked to Iran, Cuba, Sudan, Crimea, and Syria under its compliance program, some customers in these jurisdictions apparently use Poloniex’s platform to transact online digital assets. continued to use it,” he said.
Poloniex is currently owned by a consortium of organizations that includes support from Tron creator Justin Sun. As you know from Kriptokoin.com, before that, the US crypto company Circle briefly owned Poloniex. But less than two years later he sold the business. Last year, Poloniex and fellow crypto exchange Huobi announced that they will form a “strategic partnership” that includes boosting Huobi Token “ecosystem development.” By the way, Justin Sun is also Huobi’s advisor.
Poloniex collaborates with OFAC
OFAC said in its report on Monday that Poloniex was “a small startup during most of the alleged breaches.” It also took into account that Poloniex had developed its sanctions compliance program during Circle’s ownership of the company. OFAC said these facts were mitigating factors in calculating how severe the penalty would be.
Meanwhile, OFAC noted that both Circle and Poloniex are collaborating with OFAC. He also stated that this is another point in favor of the stock market. There has been no statement yet from Poloniex on the subject.
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