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Poloniex LLC, a company previously associated with the crypto exchange founded by Justin Sun, has reached a settlement with the Treasury Department, agreeing to pay over $7 million due to alleged violations of sanctions.
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As reported by the Office of Foreign Assets Control on Monday, Poloniex consented to pay $7,591,630 for breaching sanctions against Crimea, Cuba, Iran, Sudan, and Syria from January 2014 to November 2019.
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The exchange reportedly permitted users in these regions to conduct digital asset transactions – including trades, deposits, and withdrawals – involving assets amounting to $15,335,349.
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These transactions took place despite Poloniex having the means to identify the locations of these users, including Know Your Customer (KYC) data and IP addresses.
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“Poloniex provided economic advantages to 232 individuals in various jurisdictions subject to OFAC sanctions, thereby undermining the integrity of several OFAC sanctions programs,” stated a document from the Treasury.
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The Department acknowledged that Poloniex attempted to limit accounts linked to these jurisdictions as part of its compliance efforts, yet some users from those areas still accessed the platform.
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It also highlighted several mitigating factors, including that Poloniex was a small startup during the time of the violations, and that these infractions constituted a minor portion of the exchange’s overall volume.
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In addition to centralized exchanges, the Treasury Department released a report last month categorizing decentralized finance as a national security concern due to its potential for facilitating money laundering and sanctions breaches.
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In August 2021, Poloniex agreed to pay a $10 million penalty to the Securities and Exchange Commission for operating an unregistered cryptocurrency exchange.
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