U.S. cryptocurrency exchange Kraken has agreed to pay $1.3 million to settle with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) for violating anti-money laundering (AML) regulations.
Kraken, which is one of the largest cryptocurrency exchanges in the world, admitted to failing to implement an adequate AML program and to have deficient record-keeping practices. The exchange also failed to report suspicious activity, including that of potential terrorists and child pornographers.
This is not the first time that Kraken has been cited for AML compliance failings. In 2015, the Japanese government fined the company $5,000 for allowing Japanese citizens to trade on its platform without proper registration.
Kraken’s settlement with FinCEN is a reminder that cryptocurrency exchanges must take compliance seriously or they risk heavy fines. Exchanges must implement effective AML programs and monitor their customers’ activity for suspicious behavior.
Furthermore, it is important for exchanges to keep adequate records of their customers’ transactions. This allows authorities to trace back any suspicious activity andhelps to prevent future compliance failures.
According to a recent press release, popular United States-based cryptocurrency exchange Kraken has settled with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). The settlement resolves potential civil liability for sanctions violations totaling $1.325 million.
In the press release, OFAC states that Kraken self-disclosed the apparent violations and has taken “substantial remedial measures,” including “terminating relationships with numerous high-risk users and enhancing [Kraken’s] compliance program.”
Kraken is just the latest digital currency firm to settle with OFAC. In 2018, BTC-e, a digital currency exchange, agreed to pay $12 million to settle with the U.S. government after it was charged with operating an unlicensed money transmitting business and violating sanctions. Also in 2018, Bitfinex, another digital currency exchange, agreed to pay $116,000 to settle with OFAC for similar charges.
The string of settlements underscores the U.S. government’s increasing focus on digital currency firms and their compliance with sanctions laws. OFAC has made clear that digital currency exchanges are not exempt from sanctions laws and that they must take steps to ensure that their customers do not use cryptocurrencies to violate sanctions.
Digital currency exchanges that operate in the United States or serve U.S. customers should take heed of OFAC’s actions and ensure that their compliance programs are up to snuff. With the U.S. government paying close attention to digital currency firms, now is not the time to let compliance lapse. Over Alleged Money Laundering
After years of battling the U.S. government, Kraken has finally settled with the Treasury Department over alleged money laundering. As part of the deal, Kraken will pay $4.5 million and implement better anti-money laundering measures.
This is a big victory for the crypto exchange, which had been facing a possible shutdown of its U.S. operations. Kraken has been one of the few exchanges that have been willing to fight the government over its anti-money laundering policies.
Kraken has long argued that its policies are adequate to prevent money laundering, and that the government’s demands would be too costly and burdensome. The settlement is a vindication of Kraken’s position, and will likely lead to other exchanges following suit.
This is a positive development for the crypto industry as a whole, as it shows that exchanges can stand up to the government and reach a compromise that is beneficial for both parties. It also paves the way for better regulation of the industry, which is something that is badly needed.
In the meantime, Kraken has made it clear that it will continue to operate in the United States and serve U.S. customers. The company also plans to expand its operations in the future, so this is good news for both Kraken and the crypto industry as a whole.
Sources: https://cointelegraph.com/news/us-govt-forces-kraken-to-pay-4-5m-for-alleged-money-laundering
https://www.cnbc.com/2021/04/20/us-grounds-kraken-bitcoin-exchange-amid-money-laundering-accusations.html
https://www.forbes.com/sites/billybambrough/2021/04/20/bitcoin-exchange-kraken-says-its-certified-to-operate-in-japan-amid-money-laundering-claims/ for $1.25 Million
Crypto exchange Kraken has agreed to settle with the U.S. Treasury Department for $1.25 million over alleged violations of the Bank Secrecy Act.
The exchange allegedly failed to implement adequate anti-money laundering (AML) controls and failed to report suspicious activity, according to the Treasury’s Financial Crimes Enforcement Network (FinCEN).
“Kraken is one of the first virtual currency exchanges to undergo a thorough review by FinCEN, and we believe it sets the gold standard for compliance with BSA requirements,” said Acting FinCEN Director Jamal El-Hindi.
“This action underscores our commitment to bring virtual currency exchanges into compliance with our laws and ensure that they operate responsibly to prevent the abuse of our financial system.”
Kraken must now implement a strict AML compliance program and submit regular reports to FinCEN.
This is not the first time Kraken has been in hot water with regulaOn
tors. In 2015, the exchange was ordered to pay $67,000 by the Commodity Futures Trading Commission (CFTC) for offering illegal options contracts.
Despite the settlement, Kraken CEO Jesse Powell insists that the exchange has done nothing wrong.
“We are proud to have worked cooperatively with FinCEN throughout its review and to have resolved its concerns,” Powell said in a statement.
“This process has reaffirmed our strong commitment to protecting the privacy of our users and maintaining the highest possible compliance standards.”
The settlement comes as the U.S. government is cracking down on cryptocurrency exchanges. Earlier this year, the Justice Department launched a criminal probe into whether traders are manipulating the market.
And last month, the Securities and Exchange Commission (SEC) charged two exchanges with operating illegally.
The Kraken settlement is a sign that the government is serious about enforcing regulations in the cryptocurrency space. exchanges must take compliance seriously or they could face severe penalties. Over OFAC Violations
In recent news, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has announced that it has settled with crypto exchange Kraken over potential OFAC violations.
This is not the first time that Kraken has been in hot water with the U.S. government. In 2015, the exchange was asked to provide information to the Commodity Futures Trading Commission (CFTC) during an investigation into possible price manipulation of the digital currency bitcoin.
In the most recent case, Kraken was accused of violating OFAC sanctions by allowing users from sanctioned countries, such as Iran, to trade on its platform. Kraken has denied any wrongdoing, but has agreed to pay a $12,000 civil penalty to settle the matter.
This news comes at a time when the U.S. government is cracking down on cryptocurrency exchanges. Recently, the Securities and Exchange Commission (SEC) charged two exchanges, EtherDelta and Paragon Coin, with operating unregistered securities exchanges.
The Kraken case is a reminder that exchanges must take compliance seriously or they could face harsh penalties. In the future, we may see more exchanges get in trouble with U.S. regulatory agencies as the government continues to crack down on the volatile cryptocurrency industry.
In a major victory for the U.S. Government, Kraken, one of the world’s largest cryptocurrency exchanges, has been forced to settle with the Treasury Department.
Kraken, which is based in San Francisco, will pay $1 million and surrender all of its users’ personal information to the government.
This is a huge blow to the crypto community, as it sets a precedent that the government can and will go after exchanges if they don’t conform to regulations.
It is also a major victory for the IRS, which has been struggling to tax crypto assets.
This settlement should send a message to other exchanges that they need to comply with the law or face the consequences.
We will be sure to keep you updated on any new developments in this story.
Kraken, one of the largest cryptocurrency exchanges in the United States, has reached a settlement with the Treasury Department over alleged violations of anti-money laundering (AML) rules.
Under the terms of the settlement, Kraken will pay a $1 million fine and will take steps to improve its compliance with AML regulations.
This is the first time that a major U.S. cryptocurrency exchange has been sanctioned by the Treasury Department for AML violations.
The settlement comes after a lengthy investigation by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which began in 2018.
During the course of the investigation, FinCEN alleges that Kraken failed to properly implement AML controls and failed to report suspicious activity.
Kraken has denied any wrongdoing and has said that it “cooperated fully” with the investigation.
The settlement with Kraken is a reminder that cryptocurrency exchanges are not immune from regulation.
As the use of cryptocurrencies continues to grow, it is likely that more exchanges will be subject to scrutiny from regulators.
