OFAC reaches settlement with Poloniex, LLC over sanctions violation

05/02/2023 20:28 • Blockchain Briefs • 157 views

According to reports, the Office of Foreign Assets Control (OFAC) of the US Treasury Department announced on Monday that a settlement has been reached with the cryptocurrency exchange Poloniex, LLC regarding the violation of sanctions. Poloniex has agreed to pay a settlement fee of $7591630 to settle its potential civil liability for obvious violations of sanctions against Crimea, Cuba, Iran, Sudan, and Syria. OFAC stated that between January 2014 and November 2019, the Poloniex trading platform allowed customers located in sanctioned jurisdictions to engage in online digital asset related transactions (including transactions, deposits, and withdrawals) with a total value of $15335349.

Poloniex agrees to pay $7.6 million to settle allegations of sanctions violations

Introduction

Background

The US government imposes economic sanctions on several countries as part of its foreign policy. These sanctions prohibit US citizens and companies from engaging in economic transactions with certain countries or individuals.

Violation of sanctions

Poloniex, one of the largest cryptocurrency exchanges in the world, has violated US sanctions by allowing customers from Crimea, Cuba, Iran, Sudan, and Syria to engage in digital asset related transactions through its platform.

Settlement

OFAC has stated that Poloniex has agreed to pay $7591630 as a settlement fee to resolve its potential civil liability for the violation of sanctions. This decision has been made in light of the fact that from January 2014 to November 2019, the total value of transactions, deposits, and withdrawals of digital assets by individuals located in sanctioned jurisdictions amounted to $15335349.

Impact on Poloniex

This settlement is a clear indication of the serious repercussions of violating US sanctions, even if it is done unintentionally. Poloniex has since then issued a statement saying it has taken measures to ensure compliance with US law.

Conclusion

Compliance with US sanctions is crucial and failure to comply can lead to hefty fines and penalties. Poloniex, LLC’s agreement to pay a settlement fee of $7591630 sends a clear message to all companies that they need to be mindful of the restrictions on transactions and other economic activities imposed under US sanctions.

FAQ:

1. What are US sanctions?
US sanctions are economic restrictions imposed on certain countries or individuals as part of the US government’s foreign policy.
2. What are the consequences of violating US sanctions?
Violating US sanctions can lead to hefty fines and penalties, as illustrated by Poloniex, LLC’s agreement to pay a settlement fee of $7591630.
3. What measures can companies take to ensure compliance with US sanctions?
Companies should establish and implement an effective compliance program that includes screening of transactions and a system for reporting any potential violations.

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