- Crypto exchange CoinList has settled with the U.S.
- The Treasury Department’s OFAC raised various allegations against the exchange.
- The allegations stem from the exchange’s activities between 2020 and 2022.
Crypto exchange CoinList has settled with the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) over its “apparent” violations of the Russia/Ukraine-related sanctions regulations.
According to a press release of OFAC on December 13, the California-based virtual currency exchange’s settlement stems from a potential civil liability tied to allegations of processing hundreds of transactions on behalf of “users ordinarily resident in Crimea.”
CoinList’s “Apparent” Violations of Sanctions Regulations
Per OFAC’s statement, despite enabling several robust sanctions compliance measures, CoinList’s screening procedures failed to capture users who represented themselves as residents of a non-embargoed country but who nevertheless stated their address as Crimea.
“In particular, CLM 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, e.g., by identifying a city in Crimea or providing the term Crimea.” The statement read.
As OFAC alleges, CoinList provided these users a range of financial services between April 19, 2020, and May 7, 2022, including buying, selling, and “otherwise” trading of cryptocurrency tokens and assets.
In facilitating transactions on behalf of the said individuals, the crypto exchange allegedly “engaged in 989 apparent violations of the Ukraine-/Russia-Related Sanctions Regulations (URRSR), 31 C.F.R. § 589.207, totaling $1,252,280.”
While the statutory maximum civil monetary penalty applicable in such violations is $327,306,583, the OFAC considered several factors under its Enforcement Guidelines to lower the amount.
Noting that CoinList’s violations were “not voluntarily self-disclosed” and were “non-egregious,” the OFAC allowed the exchange to pay a settlement amount of $1,207,830.
Other mitigating factors included the cooperation between CoinList and the OFAC during the investigation and the exchange’s compliance record. The OFAC has not issued a penalty notice against CoinList in the five years preceding the earliest date of the transactions raised in the settled allegations.
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