• Poloniex LLC, a former crypto-exchange connected to Justin Sun, has reached a settlement agreement with the Treasury Department to pay $7.6 million for alleged sanctions violations.
• The exchange had apparently allowed customers in sanctioned regions to engage in digital asset transactions – including trades, deposits, and withdrawals – with assets totaling $15,335,349.
• Poloniex was recognized by the Treasury Department for efforts to restrict accounts connected to these jurisdictions as part of its compliance program despite users still managing to use the platform.
Poloniex Pays Fine Over Sanctions Violation
Poloniex LLC, an entity once connected to the Justin Sun-founded crypto exchange, reached a settlement agreement with the Treasury Department of United States to pay over $7 million for alleged sanctions violations between January 2014 and November 2019.
Sanctions Violations
The trading platform had allegedly let customers in sanctioned regions generate over $15 million in volume over roughly 6 years. Specifically, it allowed customers from Crimea, Cuba, Iran, Sudan, and Syria to engage in digital asset transactions – including trades, deposits and withdrawals – with assets totaling $15,335349 despite having reason to know their locations through Know Your Customer (KYC) information and IP addresses.
Mitigating Factors Recognized
The Department recognized that Poloniex made efforts to restrict accounts connected to these jurisdictions as part of its compliance program but some users still managed to use the platform nonetheless. It also noted multiple mitigating factors such as that Poloniex was a small startup at the time of the violations and that it had taken steps since then towards improving its risk assessment capabilities and customer due diligence procedures.
OFAC’s Remarks
In light of this resolution agreement between OFAC and Poloneix LLC., Andrea Gacki , Director OFAC said: “Today’s enforcement action highlights our expectations that companies evaluate their sanctions obligations on an ongoing basis—not only when they initially establish operations or expand into new markets—in order ensure they are not providing services that could facilitate prohibited transactions involving blocked persons.“
Conclusion
By paying this fine of 7 million dollars , Poloneix has closed this chapter of alleged sanctions violation committed by them during 2014-2019 . In future , they must ensure proper protocols are followed for KYC checks before allowing any user access into their platform .