Zulutrade, Inc. (Zulutrade), a Delaware-incorporated entity registered with the Commodities Futures Trading Commission (CFTC), has agreed to pay $200,000 to settle potential civil liability for apparent violations of: the Iranian Transactions and Sanctions Regulations (ITSR), 31 C.F.R. part 560; the Sudanese Sanctions Regulations (SSR), 31 C.F.R. part 538; and Executive Order 13582 (E.O. 13582) of August 17, 2011, “Blocking Property of the Government of Syria and Prohibiting Certain Transactions With Respect to Syria.” Zulutrade’s settlement with OFAC is being coordinated with Zulutrade’s primary regulator, the CFTC, which is concluding its own enforcement action against Zulutrade for violations of CFTC rules arising out of the same pattern of conduct.
OFAC determined that Zulutrade did not voluntarily self-disclose the apparent violations, and that the apparent violations constitute a non-egregious case. The base penalty for the apparent violations was $844,090,000.
Zulutrade is a CFTC-registered Introducing Broker and Commodity Trading Advisor that operates an electronic trading platform which allows its customers to automatically place currency foreign exchange (FX) trades with broker-dealers through Zulutrade’s platform. Over a number of years beginning in 2009, Zulutrade maintained accounts for over 400 persons in Iran, Sudan, and Syria, and exported services to these customers by placing FX trades via its platform. Zulutrade also originated eight funds transfers totaling $10,264.36 destined for two individuals located in Iran. Zulutrade failed to screen or otherwise monitor its customer base for OFAC compliance purposes at the time of the apparent violations. This failure was the result of a lack of awareness regarding U.S. sanctions regulations. The CFTC has coordinated with OFAC to ensure commitments by Zulutrade to enhance its sanctions compliance capabilities.