Poloniex, LLC, a Delaware corporation headquartered in Boston, has agreed to pay $7,591,630 to settle potential civil responsibility for 65,942 alleged violations of the U.S. sanctions, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) said on Monday in a statement.
“Between January 2014 and November 2019, the Poloniex trading platform allowed customers apparently located in sanctioned jurisdictions to engage in online digital asset-related transactions—consisting of trades, deposits, and withdrawals—with a combined value of $15,335,349, despite having reason to know their location based on both Know Your Customer (KYC) information and internet protocol address data,” according to OFAC.
In that way, customers were able to fund their accounts and trade, notwithstanding the restrictions imposed by U.S. authorities on their nations.
OFAC stated that Poloniex implemented a sanctions compliance program in May 2015, which included a review of KYC information for new clients in jurisdictions subject to comprehensive OFAC sanctions, but that existing customers were not retroactively vetted.
“As a result, customers who had self-identified before May 2015 as residing in a sanctioned jurisdiction were generally able to continue using Poloniex’s platform,” read the statement.
Although the company continued to strengthen its internal controls to fully comply with the sanctions, a small number of accounts opened by clients living in Crimea continued to use Poloniex platforms in 2018 and 2019.
According to OFAC, the company operated its Poloniex Trading Platform until it was sold to a third party in November 2019 and now has no commercial activities or personnel.
