Poloniex has agreed to pay $7.6 million to settle its civil case for multiple apparent sanctions violations, allowing users in sanctioned jurisdictions to conduct digital asset trades, deposits and withdrawals worth more than $15 million between 2014 and 2019.
Cryptocurrency exchange Poloniex has agreed to pay $7.6 million to the United States Treasury Department’s Office of Foreign Asset Control (OFAC) to settle a civil case regarding over 65,000 apparent violations of multiple sanctions programs.
The settlement amount will be used to address Poloniex’s alleged violations of U.S. sanctions against Crimea, Cuba, Iran, Sudan, and Syria, where digital asset trades, deposits, and withdrawals reportedly took place between January 2014 and November 2019.
According to the government department, Poloniex permitted users in the sanctioned jurisdictions to conduct more than $15 million worth of digital asset transactions. Although Poloniex implemented a sanctions compliance program in May 2015, it allegedly did not retroactively screen users who registered at the exchange between its launch in January 2014 and the establishment of the program.
However, the violations were not considered “egregious,” and Poloniex made efforts to identify and restrict accounts with a nexus to Iran, Cuba, Sudan, Crimea, and Syria as part of its compliance program. Nevertheless, certain customers continued to use Poloniex’s platform for online digital asset-related transactions.
In 2018, stablecoin issuer Circle acquired Poloniex, after which the firm’s compliance measures “further improved,” specifically by closing accounts with IP addresses operating in Crimea, according to OFAC’s investigation. A group of investors, including Tron founder Justin Sun, purchased the firm from Circle in 2019. Poloniex and Circle provided “substantial cooperation” during OFAC’s investigation, according to the notice.
This is not the first time an exchange has faced such repercussions. Kraken, another cryptocurrency exchange, reached a settlement with the United States Treasury Department’s Office of Foreign Asset Control (OFAC) in November 2022 for similar apparent sanctions violations in Iran.