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Enforcement Release: December 8, 2023
OFAC Settles with Nasdaq, Inc. for $4,040,923 Related to Apparent Violations of the Iranian Transactions and Sanctions Regulations Undertaken by Former Armenian Subsidiary
Nasdaq, Inc. (Nasdaq), a financial services corporation headquartered in New York, New York, which owns and operates stock exchanges and other businesses worldwide, has agreed to pay $4,040,923 to settle its potential civil liability for the conduct of its former wholly owned foreign subsidiary, Nasdaq OMX Armenia OJSC (Nasdaq OMX Armenia), the former owner and operator of the Armenian Stock Exchange (ASE). In this capacity, Nasdaq OMX Armenia processed trades and settled payments through the ASE platform involving the OFAC-designated Armenian subsidiary of Iran’s state-owned Bank Mellat.[1]
[1] On October 25, 2007, OFAC added Mellat Armenia to the list of Specially Designated Nationals and Blocked Persons (SDN List) pursuant to Executive Order 13382 of June 28, 2005,...
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1) TRADING PLATFORM OPERATION AS A SERVICE
The Nasdaq case is precedential/notable for a number of reasons. First, note that it is probably not a coincidence that the enforcement release comes right after Enforcement Release: Binance Holdings, Ltd., in which, for the first time ever, OFAC penalized an entity that operates an asset exchange in connection with trades involving sanctioned persons. In Binance, however, the operator of the platform was not subject to U.S. jurisdiction, the transactions were settled by the person operating the platform, and the basis for liability as that the non-U.S. operator “caused” U.S. persons to export services to sanctioned persons when they were algorithmically matched for trades with sanctioned persons.
Here, the facts are a bit different, since the trades were not actually settled on the platform at issue, the trades did not involve and U.S....