Poloniex Settles with OFAC for $7.6 Million Over Alleged Sanctions Violations

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced a settlement with Poloniex, LLC, for alleged violations of U.S. sanctions against several countries. According to the notice issued by OFAC on May 1, Poloniex has agreed to pay $7.6 million to settle the civil case against them.

Poloniex, a digital asset trading platform, allowed its users in sanctioned jurisdictions to conduct online transactions, which included trades, deposits, and withdrawals worth over $15 million between January 2014 and November 2019, violating the sanctions imposed against Crimea, Cuba, Iran, Sudan, and Syria. OFAC states that Poloniex had reason to know the location of these users based on both Know Your Customer information and internet protocol address data.

OFAC’s notice mentions that the settlement amount reflects their determination that Poloniex’s apparent violations were not voluntarily self-disclosed and were not egregious. This suggests that Poloniex did not cooperate with OFAC during the investigation and that the violations were not severe enough to warrant more significant sanctions.

Poloniex has agreed to the settlement, indicating that they do not contest OFAC’s findings. It is crucial to note that this settlement marks another significant development in the United States’ efforts to enforce sanctions against countries like Cuba, Iran, and Syria, where digital assets have become a popular means of circumventing traditional banking channels.

OFAC’s announcement serves as a reminder to financial institutions and digital asset exchanges to exercise caution while conducting transactions and adhere to the guidelines issued by regulatory bodies. Violations of these guidelines can result in hefty fines, as demonstrated in the case of Poloniex.

In conclusion, the settlement between OFAC and Poloniex indicates that the U.S. government is actively monitoring digital asset transactions and is determined to enforce sanctions against countries deemed a threat to national security. The case serves as a warning to other digital asset exchanges to ensure compliance with OFAC regulations and guidelines to avoid similar sanctions in the future.

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