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Poloniex, LLC settles with OFAC for $7,591,630

May 01, 2023

OFAC has issued an Enforcement Release announcing it has settled with Poloniex, LLC, for $7,591,630 related to apparent violations of multiple sanctions programs.

Poloniex, LLC, a Delaware company with its principal place of business in Boston, Massachusetts, that operated an online trading and settlement platform previously doing business as Poloniex Inc., has agreed to remit $7,591,630 to settle its potential civil liability for 65,942 apparent violations of multiple sanctions programs. 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 information and internet protocol address data. The settlement amount reflects OFAC’s determination that Poloniex’s apparent violations were not voluntarily self-disclosed and were not egregious.

As a result of its compliance deficiencies, between approximately July 28, 2015, and September 2, 2019, Poloniex processed 65,942 online digital asset-related transactions with a combined value of approximately $15,335,349 for 232 customers apparently located in sanctioned jurisdictions, predominantly in Crimea, but also in Cuba, Iran, Sudan, and Syria. Specifically, Poloniex engaged in the following Apparent Violations: 57,263 Apparent Violations of section 1(a)(iii) of Executive Order 13685 of December 19, 2014, “Blocking Property of Certain Persons and Prohibiting Certain Transactions with Respect to the Crimea Region of Ukraine”; 3,784 Apparent Violations of the Cuban Assets Control Regulations, 31 C.F.R. § 515.201; 1,466 Apparent Violations of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. § 560.204; 3,428 Apparent Violations of the now-repealed Sudanese Sanctions Regulations, 31 C.F.R. § 538.205; and one Apparent Violation of the Syrian Sanctions Regulations, 31 C.F.R. § 542.207.

The statutory maximum civil monetary penalty applicable in this matter is $19,692,872,800. OFAC determined that the Apparent Violations were not voluntarily self-disclosed and were
non-egregious. Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines (“Enforcement Guidelines”), the base civil monetary penalty amount applicable in this matter
equals the applicable schedule amount, which in this case is $99,237,000. The settlement amount of $7,591,630 reflects OFAC’s consideration of the General Factors under the
Enforcement Guidelines.

First published on 05/01/2023

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