Poloniex Agrees to $7.59M Settlement with US OFAC

The US Office of Foreign Assets Control (OFAC) and Poloniex, a cryptocurrency exchange that Justin Sun bought from Circle in 2019 and now operates under the name Poloniex, have agreed to a settlement. Following the settlement, Poloniex must pay $7.59 million to cover any potential legal responsibility for breaking sanctions imposed on some nations, including Crimea, Sudan, Cuba, Iran, and Syria.

Poloniex Fined $7.59M for Allowing Sanctioned Countries to Trade

According to a press statement from OFAC, between January 2014 and November 2019, the platform had over 66,000 violations of multiple sanctions programs, allowing users from the Crimea, Iran, Cuba, Sudan, and Syria to trade up to $15 million in total. Although Poloniex began operations in January 2014, a sanctions execution plan was not implemented until May 2015. Customers from sanctioned nations who were already utilizing the platform may keep doing so because the compliance program was not retroactive, according to a Treasury paper.

By permitting users from specific nations to trade, the cryptocurrency exchange breached sanctions policies, according to the US Office of Foreign Assets Control (OFAC). Some customers from Iran, Sudan, Cuba, Crimea, and Syria were able to continue trading on the platform despite Poloniex’s compliance program. It attempted to limit accounts from these nations, according to OFAC but was unable to completely stop such transactions.

A group of companies, including Justin Sun, the developer of Tron, presently owns the exchange. Before that, American cryptocurrency company Circle briefly held Poloniex before selling it less than two years later. Following the transfer of the exchange company, Poloniex LLC seems to be the only surviving U.S. legal entity.

In a report, the US Office of Foreign Assets Control (OFAC) claimed that the cryptocurrency firm violated restrictions by allowing users from specific nations to trade. However, OFAC also acknowledged Poloniex’s efforts to enhance its sanctions compliance program while it was owned by Circle. Because Circle and Poloniex worked with OFAC, the punishment was less severe. A spokesperson has not responded to requests for comment.

Poloniex and Huobi Announce Strategic Partnership with Focus on Huobi Token

Two cryptocurrency exchanges, Poloniex and Huobi, declared a “strategic alliance” in 2022 to advance the ecosystem’s growth for Huobi Token. Huobi receives advice from Justin Sun, who bought Poloniex. Although the partnership’s precise terms are not public, it is possible that both trading platforms and their users will gain from it.