Background and OFAC Investigation
CoinList, a well-known cryptocurrency exchange operating in the United States, has reached a settlement of $1.2 million with the Treasury’s Office of Foreign Assets Control (OFAC) in response to accusations of breaking sanctions regulations. OFAC disclosed on December 13th that CoinList had processed 989 transactions for users located in Crimea, a region currently under Russian occupation, from April 2020 to May 2022.
Violations and OFAC Findings
CoinList had opened 89 accounts for customers who claimed to reside in Russia, but each of them provided addresses in Crimea. OFAC concluded that CoinList should have known that these transactions were related to Crimea, thus indirectly supporting the region in violation of U.S. sanctions.
OFAC acknowledged CoinList’s cooperation during the investigation and noted that the volume of transactions violating sanctions was only a small portion of the exchange’s overall transaction volume.
In 2014, after the annexation of Crimea by Russian forces, the United States implemented sanctions on the region under the Obama administration. CoinList’s alleged violations occurred between April 2020 and May 2022, a period when these sanctions were firmly in effect.
It is worth mentioning that in May of the same year, Poloniex agreed to pay a substantial $7.6 million settlement for over 65,000 apparent sanctions violations, including those related to Crimea. Additionally, Binance, one of the world’s largest crypto exchanges, faced a significant $4.3 billion settlement with U.S. officials. This settlement encompassed allegations of money laundering, fraud, and apparent violations of sanctions regulations.
By addressing its violations and settling with OFAC, CoinList aims to move past this incident and focus on maintaining compliance within the regulatory framework while conducting its cryptocurrency exchange operations.