Kraken — $362,158 OFAC Penalty (2022)
OFAC settled with Kraken (Payward) for apparent violations related to users in sanctioned jurisdictions.
Penalty amount: $362,158 · Year: 2022 · Enforcer: OFAC (US Treasury)
What happened
Kraken was penalized by the Office of Foreign Assets Control (OFAC) in 2022. The case is instructive for any organization handling cross-border payments, crypto transactions, or customer onboarding where sanctioned parties may be present.
Violations cited
- Allowing users from Iran to trade
- Inadequate IP geolocation screening
- Failure to act on sanctions alerts
- Insufficient customer screening
Lessons for compliance teams
- IP geolocation on every login and transaction
- Wallet screening on deposit and withdrawal
- Automated account freezes for sanctioned jurisdictions
- Regular sanctions training for compliance staff
How this could have been prevented
In nearly every OFAC penalty case, the root cause is the same: inadequate or outdated sanctions screening. The sanctioned parties were on the SDN list at the time — they simply weren't caught. Real-time screening against the current SDN list, with proper name-matching and fuzzy logic, would have flagged most of these transactions before they completed.
Free screening: SanctionsAI provides a free OFAC sanctions screening API. Screen customers, wallets, and transactions against the SDN list in real time. Get API key →