Cryptocurrency exchange Kraken is under federal investigation for potential violation of US sanctions by allowing users in Iran and elsewhere to buy and sell digital tokens, the New York Times reported, citing people with knowledge of the matter.

The US Treasury Department's Office of Foreign Assets Control has been investigating Kraken since 2019 and is expected to impose a fine, according to the report.

Kraken said it does not comment on specific discussions with regulators, while a Treasury spokesperson declined to comment.

Privately held Kraken is the latest cryptocurrency company to come under the regulatory scanner, as the rapidly growing industry gets caught in the crosshairs of the federal government.

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