Crypto Exchange Poloniex Agrees to $7.6M Fee to Settle Sanctions Violation Charges

Poloniex allegedly did not maintain proper know-your-customer practices between 2014 and 2019.

AccessTimeIconMay 1, 2023 at 6:22 p.m. UTC
Updated May 2, 2023 at 4:01 p.m. UTC
Drive the Crypto Policy Conversation Forward
October 24, 2023 • Convene • Washington D.C.Where the industry establishes the digital economy’s legal, regulatory and compliance best practices for the future.Register Now

Poloniex LLC, a U.S. entity previously affiliated with the Poloniex crypto exchange, will remit $7.59 million to settle sanctions violations allegations with the U.S. Treasury Department's Office of Foreign Asset Control (OFAC), the sanctions watchdog said Monday.

The platform had nearly 66,000 violations of various sanctions programs, allowing customers from Crimea, Cuba, Iran, Sudan and Syria to trade up to a collective $15 million between January 2014 and November 2019, OFAC said in a press release.

While Poloniex launched in January 2014, it did not have a sanctions compliance program in place until May 2015. The compliance program was also not retroactive, allowing customers from sanctioned jurisdictions who were already on the platform to continue using it, a Treasury document said.

"Although Poloniex made efforts to identify and restrict accounts with a nexus to Iran, Cuba, Sudan, Crimea and Syria pursuant to its compliance program, certain customers apparently located in these jurisdictions continued to use Poloniex’s platform to engage in online digital asset-related transactions," OFAC said.

The Poloniex exchange is currently owned by a consortium of entities, which includes backing from Tron creator Justin Sun. Prior to that, U.S. crypto company Circle briefly owned Poloniex, though it sold the business after less than two years. Poloniex LLC appears to be the remaining U.S. legal entity after the sale of the exchange business.

Last year, the Poloniex exchange and fellow crypto exchange Huobi announced they would form a "strategic partnership" that would include boosting Huobi Token "ecosystem development." Sun is also an adviser to Huobi.

OFAC said in its report Monday the fact that Poloniex LLC "was a small startup at the time of most of the" alleged violations, and that Circle improved Poloniex's sanctions compliance program during its time owning the company were both mitigating factors in calculating how severe the penalty would be.

Both Circle and Poloniex cooperated with OFAC, which was another point in the exchange's favor, OFAC said.

A Poloniex spokesperson did not immediately return a request for comment.

CORRECTION (May 1, 2023, 19:30 UTC): Clarifies the entities involved.

Edited by Nikhilesh De.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.