“Kraken’s commitment to security and transparency while building world class products and services makes it the gold standard in an industry that’s shaping the future of finance.”
Kraken has appointed CJ Rinaldi as Chief Compliance Officer at a very sensitive time for companies within the digital asset space as US regulators have added crypto exchanges as targets of their enforcement actions.
The compliance veteran in traditional and decentralized finance has been hired to further strengthen Kraken’s compliance program amid a fast-evolving regulatory landscape.
CJ Rinaldi led compliance Deutsche Bank’s swap dealer and US broker dealer
CJ Rinaldi joins Kraken from Blockchain.com, where he was a Chief Compliance Officer tasked with building out global compliance frameworks and mitigating compliance risk for the firm.
Past jobs include, several roles at Deutsche Bank, including Chief Compliance Officer for its swap dealer and US broker dealer, as well as Head of Business Line Anti-Financial Crimes Compliance supporting its investment bank, where he led a global team tasked with mitigating financial crime risk, implementing procedures and controls through effective and efficient operational solutions.
Prior to Deutsche Bank, CJ worked at UBS Investment Bank in multiple roles, including as Global Head of Client Infrastructure. He also served as Senior Counsel in the Enforcement Division of the U.S. Securities and Exchange Commission.
“Kraken is the gold standard in an industry that’s shaping the future of finance”
David Ripley, incoming Chief Executive Officer at Kraken, said: “To accelerate the adoption of cryptocurrencies around the world, Kraken must continue to navigate an increasingly complex regulatory landscape. CJ’s impressive international career in both the private and public sectors positions us for continued success in meeting global compliance needs.”
CJ Rinaldi, Chief Compliance Officer at Kraken, commented: “Kraken’s commitment to security and transparency while building world class products and services makes it the gold standard in an industry that’s shaping the future of finance. It is trusted players like Kraken that will help ensure the crypto ecosystem operates within all regulatory frameworks. “I am excited to grow Kraken’s data-driven approach to compliance, ensuring the protection of both the company and its clients.”
Kraken recently fined for onboarding customers from Iran
A recent compliance issue at Kraken forced the cryptocurrency exchange to pay $362,158 to settle its civil liability for apparent violations of US sanctions on countries like Iran, the Treasury Department’s Office of Foreign Assets Control said. Kraken also pledged to invest $100,000 into sanctions compliance controls.
Due to Kraken’s failure to timely implement appropriate geolocation tools, including an automated internet protocol (IP) address blocking system, Kraken exported services to users who appeared to be in Iran when they engaged in virtual currency transactions on Kraken’s platform.
The authorities probed Kraken’s transactions with Iranian users since 2019. In addition, the company failed to inform OFAC about these transactions and did not voluntarily disclose the violations of US sanctions.
The firm’s systems failed to analyze all data required for compliance with OFAC sanctions and therefore did not implement control measures to prevent such users of countries comprehensively sanctioned by the US government from accessing its service.
Nevertheless, the news sends an important message to crypto businesses. OFAC itself reiterated that digital asset institutions should take a risk-based approach to sanctions compliance to detect flaws in internal controls.