Coinlist Reaches $1.2 Million Settlement with OFAC for Crimea Sanctions Violations

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) filed a lawsuit against cryptocurrency exchange CoinList Markets, and the company agreed to pay more than $1.2 million to settle the charges. Despite sanctions imposed by the United States against Russia over its occupation of Crimea in 2014, Coinlist continues to execute transactions for customers residing in Ukraine’s Crimea region. This measure is a reaction to Russia’s sanctions.

San Francisco-based CoinList allowed 989 transactions worth more than $1.3 million on its platform between April 2020 and May 2022. It was the company’s responsibility to implement sanctions compliance processes, including checking both new and current customers against sanctions lists. During the month of February 2021, further measures were implemented to prevent access to customers in sanctioned areas. On the other hand, OFAC has uncovered serious flaws in the CoinList system that fails to identify individuals who claim to be citizens of countries that are not subject to the embargo but who have provided addresses in Crimea.

OFAC acknowledged that there were a variety of mitigating considerations when reaching a settlement. In the five years prior to the first breach, CoinList had not been sent with an OFAC notification. The company also agreed to assist with inquiries, and the transactions in question represented a very small portion of its overall activity. The total value of the violated transactions was $1,252,280, but the settlement amount of $1.2 million was somewhat smaller. Additionally, CoinList is expected to spend $300,000 to improve its compliance-related processes. This suspension occurs pursuant to the terms of the settlement agreement.

The non-serious nature of the offenses, which CoinList did not voluntarily disclose, is reflected in the settlement, which represents a portion of the maximum possible civil penalty of $327 million. The business, which sees relatively light trading with just $350,000 in 24-hour volume, expressed satisfaction with the results. To further demonstrate its commitment to compliance, CoinList has committed to significantly improving its compliance processes, control systems, and training.

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