Poloniex Settles Sanctions Violations for $7.59M to U.S Treasury

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Poloniex Settles Sanctions Violations for $7.59M to U.S Treasury
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  • The exchange violated more than 66,000 different penalties as per OFAC.
  • Some users located within sanctioned jurisdictions continued to use Poloniex’s platform.

Poloniex, a cryptocurrency exchange located in Boston, has agreed to pay a staggering $7.59 million. This is to resolve sanction breach accusations with the Office of Foreign Asset Control (OFAC) of the U.S. Treasury Department.

A press release from OFAC claims that the exchange violated more than 66,000 different penalties. The research indicates that between January 2014 and November 2019, clients from Crimea, Cuba, Iran, Sudan, and Syria were able to trade up to a total of $15 million due to these infractions.

Sanctions Compliance

According to the Treasury Department, individuals were permitted to fund their accounts and begin trading on Poloniex in January 2014. Poloniex, however, did not implement know your customer (KYC) policy until May 2015, sixteen months after it began operations.

This programme mandated a KYC check for new consumers from countries susceptible to severe OFAC sanctions, however, this screening process was not applied retrospectively to current customers.

Even though Poloniex, as part of its compliance programme, attempted to identify and restrict accounts with ties to Iran, Cuba, Sudan, Crimea, and Syria, the OFAC notes that some users apparently located within these jurisdictions continued to use Poloniex’s platform to engage in cryptocurrency transactions.

The latest enforcement action from the regulatory authority emphasized the significance of incorporating sanctions compliance into firms operations from the very start, especially for “new companies and those involved in emerging technologies.”

The OFAC emphasized the importance of this with regard to other recent instances. Especially, involving online digital asset enterprises offering financial services to a worldwide client base.

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