The first US court accusation against a crypto exchange for circumventing sanctions
Magistrate Judge Zia M. Faruqui of the U.S. District Court in Washington, D.C., started a case concerning the transfer of more than $10 million via a cryptocurrency exchange to circumvent U.S. sanctions.
As the Washington Post reports, the names and the platform have not yet been released, but a judge's opinion has been published, suggesting that not only the attacker is responsible but also the exchange. However, it was confirmed that the exchange had no information about the user's circumvention of sanctions. The transactions were conducted through a fake platform designed specifically to circumvent financial bans.
As the experts point out, it is likely that the due diligence has not been sufficiently conducted, as when registering legal entities on the platform, the stock exchange must identify all beneficiaries and company directors and make sure that they are not on sanctions lists.
This is the first time the Department of Justice has brought such a criminal case. The case signals that cryptocurrency exchanges are responsible for users who evade sanctions on their platforms, regardless of whether the exchange conspires knowingly or not. Further, Justice Faruqui's memorandum equated digital assets with traditional assets in circumventing sanctions.
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