Poloniex Agrees To Pay $7.6 Million To Settle Sanction Violation Charges

  • Poloniex has agreed to pay $7.6 million as part of a settlement agreement with the U.S. Office of Foreign Assets Control. 
  • The multi-million dollar fee will settle charges related to the alleged violation of multiple sanctions programs.
  • The crypto exchange was accused of 66,000 violations of multiple sanctions programs between 2014 and 2019.

Crypto exchange Poloniex is set to shell out a significant chunk of cash after reaching a settlement agreement with the U.S. Department of Treasury. The California-based exchange has agreed to pay a whopping $7.59 million to the Office of Foreign Assets Control (OFAC) in order to settle allegations related to violation of sanctions. 

Poloniex Accused Of Over 65,000 Violations In 5 Years

According to a press release from the Department of Treasury’s OFAC, Poloniex has agreed to remit $7,591,630 to settle its potential civil liability for apparent violations of sanctions enforced by the agency against Crimea, Cuba, Iran, Sudan, and Syria. The agency alleged that between January 2014 and November 2019, Poloniex allowed customers from sanctioned jurisdictions to initiate transactions on its trading platform. These included trades, deposits, and withdrawals with a combined value exceeding $15 million. The agency highlighted the lapse by the exchange in enforcing appropriate KYC norms. 

This enforcement action, similar to other recent cases involving online digital asset companies, emphasizes the importance for new companies and those involved in emerging technologies to incorporate sanctions compliance into their business functions at the outset, especially when the companies seek to offer financial services to a global customer base.

OFAC acknowledged that while the alleged violations were not voluntarily self-disclosed they were non-egregious. OFAC agency stated that under its Economic Sanctions Enforcement Guidelines, the penalty imposed on the crypto exchange would be over $99 million and that the final settlement amount was indicative of the agency’s consideration of the general factors under the enforcement guidelines. The agency also took into consideration the fact that Poloniex was a small startup at the time of the alleged violations. 

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