Poloniex permitted consumers from sanctioned nations to trade in excess of $15 million.
OFAC stated that Poloniex will pay $7.6 million for multiple sanctions violations. Poloniex enabled consumers in sanctioned nations to trade and transact more than $15.3 million worth of digital currencies through nearly 66,000 transactions, according to the regulator.
The settlement amount was determined by OFAC based on the fact that Poloniex’s violations were “not voluntarily self-reported” and “not egregious.”
The pertinent violations occurred between January 2014 and November 2019 and involved activities in Cuba, Iran, Sudan, and Syria.
According to the Treasury and OFAC, Poloniex possessed ample KYC (know-your-customer) and IP address data to be aware of the sanctions violations. Despite beginning its IP address monitoring and Know Your Customer (KYC) data collection in 2015, Poloniex did not begin blocking banned IP addresses until 2017.
By late 2017, OFAC had admitted that Poloniex had implemented new limits that “began to substantially reduce” infractions. The authority also said that Circle had purchased Poloniex in February 2018 before selling it in 2019 and that this temporary purchase had led to tighter regulation of Poloniex’s exchange.
The settlement reached today is not the first time regulators have taken action against Poloniex. In August 2021, Poloniex reached a settlement with the U.S. Securities and Exchange Commission (SEC). The regulator determined Poloniex operated an unregistered digital currency exchange and reached a $10.4 million settlement.
Prior to the above SEC settlement, the Ontario Securities Commission (OSC) also took action against the company in May 2021.
Poloniex remains a popular exchange with a moderately high volume despite these controversies. In the previous twenty-four hours, the trading volume on the platform was $59 million. In recent months, the platform has also added new trading features.
Poloniex is presently owned by a group of investors that includes Justin Sun, the creator of TRON and a consultant for the rival exchange Huobi.
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