Poloniex reaches $7.6M settlement with U.S. Treasury’s OFAC

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has settled with Poloniex, according to an announcement on May 11.

Poloniex will settle with OFAC

Poloniex will pay $7.6 million over various sanctions violations, OFAC said. The regulator indicated that Poloniex allowed customers in sanctioned countries to trade and transact more than $15.3 million of digital currencies through nearly 66,000 transactions.

 

OFAC determined the amount of the settlement based on the fact that Poloniex’s violations were “not voluntarily self-disclosed” and were “non-egregious.”

The relevant violations took place between January 2014 and November 2019 and concerned activity in four countries: Cuba, Iran, Sudan, and Syria.

According to the Treasury and OFAC, Poloniex had sufficient KYC (know-your-customer) information and IP address data to know that the sanctions violations took place. Poloniex did not begin blocking prohibited IP addresses until 2017 despite the fact that it monitored IP addresses and collected KYC information data beginning in 2015.

OFAC acknowledged that Poloniex added restrictions by late 2017, which “began to substantially reduce” violations. The regulator additionally noted that Circle acquired Poloniex in February 2018 before selling it in 2019 and said that the brief acquisition resulted in additional controls on Poloniex’s exchange.

 

Poloniex has been targeted by other agencies

Today’s settlement is not the only time that regulators have taken action against Poloniex.

Poloniex previously settled with the U.S. Securities and Exchange Commission (SEC) in August 2021. The regulator determined that Poloniex operated an unregistered digital currency exchange and reached a settlement amounting to $10.4 million.

Canada’s Ontario Securities Commission (OSC) also took action against the company in May 2021 prior to the above SEC settlement.

Despite those controversies, Poloniex remains a popular exchange with a moderately high volume. The platform handled $59 million in trading volume over the past 24 hours. The platform has also added new trading features in recent months.

 

Poloniex is currently owned by a group of investors that includes Justin Sun — the founder of TRON and an advisor to the competing exchange Huobi.