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CoinList Settles $1.2M with OFAC for Sanctions Issue

CoinList, a U.S.-based cryptocurrency exchange, has reached a $1.2 million settlement with the Office of Foreign Assets Control (OFAC) over allegations of violating sanctions.

Key Takeaways

  • CoinList settles with OFAC for $1.2 million over alleged sanctions violations related to transactions involving Crimea.
  • Between April 2020 and May 2022, CoinList processed 989 transactions for users in Crimea, breaching U.S. sanctions.
  • OFAC considers the violations “non-egregious” but points out deficiencies in CoinList’s screening procedures.
  • CoinList cooperated with U.S. officials, and the volume of sanctioned transactions was a small percentage of the total handled by the exchange.

CoinList’s $1.2 Million Settlement

CoinList, a prominent cryptocurrency exchange headquartered in the United States, has agreed to a settlement of $1.2 million with the Office of Foreign Assets Control (OFAC) following allegations of violating sanctions.

The settlement arises from the exchange’s involvement in processing 989 transactions for users located in Crimea, a region that, while part of Ukraine, is currently occupied by Russia. The specified timeframe for these transactions spans from April 2020 to May 2022.

In an official notice issued on December 13, OFAC acknowledged that the violations were categorized as “non-egregious.” However, it emphasized that these violations were not voluntarily self-disclosed by CoinList.

Industry Trends and Similar Enforcement Actions

This enforcement action against CoinList aligns with a broader trend within the cryptocurrency industry. Other U.S.-based crypto firms, including Poloniex, have faced similar actions for apparent violations of sanctions.

OFAC highlighted that CoinList opened 89 accounts for customers who indicated “Russia” as their country of residence but submitted addresses located in Crimea. Despite this, CoinList reportedly had knowledge or reason to believe that the transactions involved residents of Crimea, leading to a breach of U.S. sanctions and contributing economic benefits to the region.

To Conclude

CoinList’s $1.2 million settlement with OFAC underscores the regulatory scrutiny faced by cryptocurrency exchanges in ensuring compliance with sanctions.

While the violations were categorized as “non-egregious,” deficiencies in screening procedures and challenges in identifying users’ actual locations highlight the evolving landscape of regulatory expectations within the crypto space.