United States-based cryptocurrency exchange, CoinList, has reached a settlement of $1.2 million with the Treasury’s Office of Foreign Assets Control (OFAC) in response to allegations of facilitating transactions that violated sanctions regulations.
OFAC disclosed on December 13th that CoinList had processed a total of 989 transactions for users located in Crimea, a region currently under Russian occupation, spanning from April 2020 to May 2022. While the violations were categorized as “non-egregious,” the exchange did not voluntarily disclose the violations.
OFAC stated that CoinList’s screening procedures failed to identify users who claimed to reside in non-embargoed countries but provided addresses within Crimea upon account registration. Specifically, CoinList opened 89 accounts for customers who had specified their residence as “Russia,” but all of them supplied addresses in Crimea.
OFAC concluded that CoinList “knew or had reason to know” that these transactions were likely connected to residents of Crimea, thereby violating U.S. sanctions and indirectly benefiting the region.
CoinList’s cooperation with U.S. authorities during the investigation was noted by OFAC, and it was emphasized that the volume of transactions in apparent violation of sanctions constituted only a small percentage of the exchange’s overall transaction volume.
Sanctions and CoinList’s violations
In 2014, Russian forces annexed Crimea, formerly a part of Ukraine, leading to the imposition of sanctions on the region by then-U.S. President Barack Obama. These sanctions were reinforced when Russia’s military invaded Ukraine in February 2022.
CoinList’s alleged violations occurred during the period between April 2020 and May 2022, a time when sanctions on Crimea were firmly in place.
CoinList is not the first U.S.-based cryptocurrency exchange to face enforcement actions from OFAC over sanctions-related issues. In May of the same year, Poloniex agreed to a substantial $7.6 million settlement for over 65,000 apparent sanctions violations, including those connected to Crimea.
Furthermore, Binance, one of the world’s largest cryptocurrency exchanges, faced a significant $4.3 billion settlement with U.S. officials. This settlement encompassed allegations of money laundering and fraud, which also included apparent violations of sanctions regulations.