CoinList Agrees to $1.2M Settlement Over Russian Sanctions Violations

CoinList, the crypto exchange, recently settled a $1.2 million charge with the U.S. Office of Foreign Assets Control (OFAC) over allegations that it allowed users in Crimea, a Ukrainian peninsula annexed by Russia, to use its platform.

The OFAC notice reveals that “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.” It’s clear that screening protocols failed to recognize the residence in Crimea, and this has led to the hefty settlement.

Russia invaded Crimea in 2014, resulting in most countries continuing to recognize the region as part of Ukraine and imposing sanctions on Russia.

Despite the serious nature of the allegations, the fine was significantly lower than the potential maximum of nearly $327 million. This was due to CoinList’s past compliance, cooperation and the small number of transactions involved relative to the exchange’s total volume.

The OFAC emphasized the importance of incorporating risk-based sanctions compliance into business functions for virtual currency companies and those involved in emerging technologies, especially when dealing with a global customer base.

However, CoinList is taking the settlement as a learning opportunity and has committed to investing $300,000 into compliance controls, making it one of the largest investments made by a crypto company in a similar position.

Despite being a relatively small exchange, with just $400,000 in daily volume, CoinList closed a $100 million funding round in October 2021 that valued the company at $1.5 billion.

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