The Securities and Exchange Commission is investigating Coinbase. Another cryptocurrency exchange is also under the scrutiny of regulators: they have been trying to sanction Kraken for a long time and finally found a reason. This is starting to look like a coordinated attack.
Regulators seem to want to tighten the noose around the neck of the crypto industry, which has been demanding clear rules from them for years. Federal agencies seem to have finally voiced a charge against the industry.
Kraken allegedly violated US sanctions
Coinbase is not the only cryptocurrency trading platform on the radar of regulators. Kraken, another popular US exchange, is under investigation by the Treasury Department. According to the New York Times, the US Treasury Department’s Office of Foreign Assets Control has been investigating Kraken since 2019 for suspected violations of US sanctions. The Treasury Department is expected to impose a fine, yet no timeline has been announced.
Kraken, which allows users to buy and sell more than 100 cryptocurrencies, allegedly allowed sanctioned Iranians to use its platform.
“Kraken does not comment on specific discussions with regulators,” Kraken’s Chief Legal Officer Marco Santori said. “Kraken has robust compliance measures in place and continues to grow its compliance team to match its business growth. Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues.”
The federal government has extended economic and financial sanctions imposed on certain countries and officials to the crypto industry. The US government is convinced that sanctioned entities and individuals can use cryptocurrency exchanges to circumvent sanctions.
To avoid penalties, some firms are taking the initiative themselves. For example, OpenSea, a marketplace for non-fungible tokens (NFT), blocked Iranian users this year. That is not the case with Kraken, a private company that believes its mission is to democratize finance, not to use crypto as a “weapon.”
“Sometimes the hardest thing about having power is knowing when not to use it. Our mission is better served by focusing on individual needs above those of any government or political faction. The people’s money is an exit strategy for humans, a weapon for peace, not for war,” Kraken’s CO-Founder and CEO Jesse Powell posted on Twitter last February.
“Besides, if we were going to voluntarily freeze financial accounts of residents of countries unjustly attacking and provoking violence around the world, step 1 would be to freeze all US accounts. As a practical matter, that’s not really a viable business option for us,” he added.
Based on www.thestreet.com