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Poloniex Exchange Pays $7.6M To OFAC for Alleged Violation

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The U.S. Department of Treasury has just revealed that Poloniex Exchange agreed on settlements of $7.6 million for sanctions violations.

Boston-based Poloniex crypto exch ange agreed to settle with the United States Treasury Department Office of Foreign Asset Control.

Reportedly, the trading exchange allowed customers in sanctioned areas to generate more than $15 million in volume for nearly 6 years.

Poloniex Violations of Multiple U.S Sanctions

According to a recent report updated by the Treasury, there is a detailed execution of the agreement between OFAC and Poloniex.

OFAC asked the Boston-based exchange to pay $7, 591,630 as a settlement for violations beginning from when it commenced trading activities in January 2014.

Poloniex LLC is an organization once linked to the Justin Sun-founded cryptocurrency exchange. The entity built a platform for the trading of digital assets.

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As a result, its customers could fund their accounts and easily engage in additional trading activities.

Details of the Story

According to the May 1 announcement by OFAC, the crypto exchange violated sanctions against Cuba, Crimea, Syria, Sudan, and Iran from January 2014 to November 2019.

Poloniex allowed their customers in such regions to carry out digital assets transactions.

These include deposits, trades, and withdrawals with assets up to $15,335,349.

Notably, Poloniex had adequate knowledge of the sanctions. Also, there were the users’ KYC (Know-Your-Customer) information and IP addresses. But they still allowed them to transact.

According to the Treasury document, Poloniex gave economic benefits to up to 232 individuals in various regions under OFAC sanctions.

As a result, they brought harm to many OFAC sanctions programs.

On the side of Poloniex, they tried to restrict the accounts linked to these regions under sanction as part of their compliance program.

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However, certain users from the jurisdiction under OFAC sanction still penetrated to use the crypto exchange, and even the Department noted that.

There were so many weakening factors, including the fact that Poloniex was still a small startup during this period of violations.

Moreover, the violations displayed a small part of the crypto exchange’s overall volume.

Notably, this is one of many fine against the exchange. Poloniex also agreed to settle SEC (Securities and Exchange Commission) with $10 million in August 2021 for operating an unregistered Crypto exchange.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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