Kraken, a cryptocurrency exchange nominally based in San Francisco, is allegedly under federal investigation for allowing users from Iran and other countries under trade sanctions to trade cryptocurrencies on its platform, according to a report by The New York Times.
Citing company insiders, The Times says that the Treasury Department’s Office of Foreign Assets Control has been investigating Kraken since 2019 and is expected to levy a fine against the company.
“Kraken does not comment on specific discussions with regulators," said Marco Santori, chief legal officer at Kraken, in a statement. "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 company was fined $1.25 million last year by the Commodity Futures Trading Commission for allegedly skirting regulations related to offering margined retail commodity transactions in cryptocurrencies.
Earlier this month, a Reuters article pointed to Iranian traders skirting sanctions on Binance, the world's largest cryptocurrency exchange.
Kraken has raised over $126 million to date and is valued at $11 billion, although the valuation was set before the collapse of cryptocurrency prices and a steep decline in trading volumes.
CEO Jesse Powell has made headlines recently for his incendiary comments to employees regarding social issues and a manifesto published by the company encouraging employees to leave if they did not agree with the company's culture.
The same Times report detailing the federal investigation also alleged that Powell said in a Slack message to employees that parental leave was a burden on the company and raising children “might as well be a second job, a distracting hobby or a harmful addiction” and “is something outside of work that has a negative impact on work.”
