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US crypto entity, Poloniex LLC, which was previously affiliated with Poloniex crypto exchange, has agreed to pay $7.59 million to settle allegations of sanctions violations with the US Treasury Department's Office of Foreign Asset Control (OFAC), as per a statement from the sanctions watchdog on Monday.
OFAC alleged that the platform had committed nearly 66,000 violations of various sanctions programs, allowing customers from Crimea, Cuba, Iran, Sudan, and Syria to trade up to a total of $15 million between January 2014 and November 2019.
“Although Poloniex made efforts to identify and restrict accounts with a nexus to Iran, Cuba, Sudan, Crimea and Syria pursuant to its compliance program, certain customers apparently located in these jurisdictions continued to use Poloniex’s platform to engage in online digital asset-related transactions," OFAC said.
According to the Treasury document, Poloniex had launched in January 2014 but failed to implement a sanctions compliance program until May 2015. Furthermore, the compliance program was not retroactive, allowing customers from sanctioned jurisdictions, who were already on the platform, to continue using it.
Despite Poloniex making efforts to identify and restrict accounts with links to the aforementioned countries, OFAC noted that certain customers located in these jurisdictions continued to use Poloniex's platform to engage in online digital asset-related transactions.
Poloniex is currently owned by a consortium of entities, including backing from Tron creator Justin Sun. The crypto exchange had been briefly owned by US crypto company Circle before it was sold after less than two years. Poloniex LLC appears to be the remaining US legal entity after the sale of the exchange business.
OFAC reported that Poloniex LLC was a small start-up at the time of most of the alleged violations and that Circle improved Poloniex's sanctions compliance program during its ownership tenure. The regulator deemed both to be mitigating factors in determining the severity of the penalty.
Circle and Poloniex cooperated with OFAC, which was another point in the exchange's favor, OFAC said. A Poloniex spokesperson was unavailable for comment on the matter.
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