Kraken is allegedly being investigated for violating U.S. sanctions on Iran, sources said in a report published by The New York Times.
U.S.-based cryptocurrency Kraken is reportedly under federal investigation over what sources say are Iran-related breaches, The New York Times reported on Tuesday.
According to the publication, the exchange has been under investigation for allowing sanctioned Iranian customers to buy and sell cryptocurrencies, an investigation by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) since 2019.
OFAC will reportedly fine Kraken, another potential penalty for the private company in less than a year.
In September 2021, the Commodity Futures Trading Commission (CFTC) fined the exchange provider $1.25 million for operating an unregistered over-the-counter crypto trading service.
Increased regulatory scrutiny
The crypto industry is facing increasing regulatory scrutiny in light of recent events, and it is widely believed that the investigation into Kraken comes as the report is published.
The collapse of Terra (LUNA) and stablecoin project TerraUSD (UST) and crypto hedge fund Three Arrows Capital (3AC) appears to be just the tip of the iceberg. The crypto winter is still here, and the turmoil has driven crypto lenders Celsius Network and Voyager Digital out of business.
These events will only fuel the tighter regulatory approach that is emerging around the world.
On Tuesday, the U.S. Securities and Exchange Commission (SEC) was also investigating the listing of alleged security tokens on cryptocurrency exchange Coinbase. U.S.-based Coinbase refuted the U.S. Securities and Exchange Commission’s claim that the platform had listed securities.