Kraken platform under investigation in the United States

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The New York Times reports that Kraken is doing this subject of investigation to allow users from sanctioned countries to sell and buy cryptocurrencies.

Authorities are increasingly trying to prevent the use of cryptocurrencies to circumvent sanctions. This survey started a few years ago he was already walking in 2019 and this could turn into a big fine for the Kraken.

Investigation in progress

The Kraken is under investigation, according to the New York Times. Office for the Control of Foreign Assets. It is the law enforcement and financial intelligence agency within the United States Department of the Treasury.

The exchange will be accused of allowing users from sanctioned countries to sell and buy cryptocurrencies. Therefore, the Ministry of Finance is trying to find out if this is the case. the facts are true or not. So far, neither the US government nor Kraken have confirmed the existence of this investigation.

However, it was launched in 2019, as quoted by the New York Times. minimum 5 people associated with the company or close to the investigation. These people specifically pointed out that if the allegations were true, the Kraken could be fined again.

In fact, Kraken has had to pay in the past $ 1.25 million fine when the CFTC filed a (Commodity Futures Trading Commission) complaint against the platform for violating the Cryptocurrency Exchange Act in 2021.

The Treasury Department is currently investigating whether Kraken has allowed it to receive assets on accounts in Iran, Syria, or even Cuba, countries subject to US sanctions. Testimony from a former employee appears to confirm that Kraken was able to generate revenue from users in these countries. This is evidenced by the report over 1500 users in Iran, 149 in Syria or even 83 in Cuba could benefit from the trading platform.

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Careful monitoring of cryptocurrencies

United States government like Many countries are concerned the role of cryptocurrencies in circumventing sanctions in some countries. In fact, several authorities have confirmed that the cryptocurrency industry is preventing these sanctions from working. Therefore, more supervision of the sector is needed.

Like the Treasury Department, several agencies have warned exchanges not to offer services to sanctioned countries, including Russia. If some platforms, such as Binance, have collaborated, for example, by closing the accounts of senior Russian officials in recent months. others have more indecisive accept such a request. Including Kraken, which announced in March 2022 that it would not ban unauthorized users.

In February 2022, Kraken CEO Jesse Powell tweeted about the Ukrainian government’s request to impose sanctions on Russia following its attack on their country. This indicated that the platform could not make this decision. without legal claims.

1/6 I understand the reasons for this request, but despite my deep respect for the Ukrainian people, @krakenfx cannot block the accounts of our Russian clients without legal obligations.

Russians should be aware that such a demand may be inevitable. #NYKNYC https://t.co/bMRrJzgF8N

– Jesse Powell (@jespow) February 28, 2022

Finally, this traditional North Korean hacks As for the cryptocurrency industry, governments have become more environmentally aware. In April 2022, the Ministry of Finance authorized 3 ETH addresses associated with North Korea.

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The European Union follows suit

The US isn’t alone in stepping up the crackdown on the cryptocurrency industry. European Union it has also recently adopted new measures to combat illegal activities. In particular, money laundering, as well as the creation of MiCa (crypto asset markets). This institution is intended to serve as the basis for cryptography regulation in the region.

These measures have just been introduced. Therefore, platforms are starting to adapt to them to fully respect them. For can act legally in the member countries of the European Union.

Kraken is not the only one who must fully comply with applicable laws. The rules for the cryptocurrency industry remain in place still relatively unclear but the tone has hardened in recent months. Mostly after various failures such as the flooding of Earth, the failure of some platforms. All this with the aim of better regulating this sector in order to limit illegal activities, as well as protect users.

Financial Stability Board (CSF) plans to present a set of G20 recommendations as early as October 2022 and hopes international regulations will be put in place as soon as possible to ensure fair and identical controls in as many countries as possible to balance this sector.

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