Crypto Exchange CoinList Settles OFAC's Russian Sanctions Allegations for $1.2M

CoinList did not detect users who claimed to be from non-embargoed countries, but provided addresses in Crimea, OFAC said.

AccessTimeIconDec 14, 2023 at 9:49 a.m. UTC
Updated Mar 9, 2024 at 1:50 a.m. UTC
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Crypto exchange CoinList paid $1.2 million to settle U.S. Office of Foreign Assets Control allegations it allowed users in Crimea, a Ukrainian peninsula annexed by Russia, to use the platform.

CoinList "opened 89 accounts for customers, nearly all of whom had specified 'Russia' as their country of residence but all of whom provided addresses in Crimea upon account opening," the OFAC notice reads. "Screening protocols failed to recognize that ‘Crimea’ or a city name in Crimea, provided in another data field, indicated likely residence in Crimea."

Russia invaded Crimea in 2014, and most countries still see the region as part of Ukraine. The occupation led to the imposition of sanctions on Russia.

OFAC said that the fine was significantly lower than the potential maximum of nearly $327 million because of CoinList's past compliance, cooperation and the small number of transactions involved relative to the exchange's total volume.

“This enforcement action further emphasizes the importance for virtual currency companies and those involved in emerging technologies to incorporate risk-based sanctions compliance into their business functions, especially when the companies seek to offer financial services to a global customer base,” OFAC said in a media release.

For its part, CoinList said that it is taking this as a learning opportunity to invest in compliance.

“Our unwavering commitment to compliance is reinforced through our agreement to invest $300,000 into compliance controls – one of the largest investments made by a crypto company in our position,” the exchange said in a published statement.

CoinList is a relatively small exchange, according to CoinGecko data, with just $400,000 in daily volume, mostly with Tether and Solana pairs. Binance, the biggest exchange, records daily volumes of billions of dollars.

The exchange closed a $100 million funding round in October 2021 valuing the company at $1.5 billion.

Edited by Sheldon Reback.


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