CoinList Pays $1.2 Million to Settle Alleged Sanctions Violations Involving Russia

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Published: December 14, 2023 at 5:37 am Updated: December 14, 2023 at 5:37 am

Edited and fact-checked:
December 14, 2023 at 5:37 am

In Brief

CoinList exchange will pay $1.2 million to settle allegations by U.S. OFAC of permitting Crimea users access to its platform.

CoinList exchange agreed to pay $1.2 million to settle allegations by the U.S. Office of Foreign Assets Control (OFAC) that it permitted users in Crimea to access its platform.

This settlement addresses claims that the exchange did not adequately screen users who were from non-embargoed countries but provided addresses in Crimea upon account opening.

OFAC highlighted that CoinList opened 89 accounts for customers, predominantly listing ‘Russia‘ as their residence but providing addresses in Crimea. The agency pointed out deficiencies in CoinList’s screening protocols, which failed to identify ‘Crimea’ or Crimean city names in user data as indicative of residence in the sanctioned region.

The Background of Crimea Sanctions

The sanctions stem from Russia’s 2014 invasion of Crimea, which most countries continue to recognize as part of Ukraine. The occupation prompted a range of sanctions against Russia, affecting various entities engaging with the region.

OFAC stated that the $1.2 million fine was considerably lower than the maximum potential penalty of nearly $327 million. This reduction was due to CoinList’s history of compliance, cooperation with the investigation, and the relatively small scale of the transactions compared to the exchange’s overall volume.

CoinList’s Present Scenario

The case underscores OFAC’s emphasis on the necessity for virtual currency companies and those in emerging technologies to integrate risk-based sanctions compliance, especially when offering services globally.

In response, CoinList acknowledged the situation as a learning opportunity and committed to enhancing its compliance controls. The exchange announced an investment of $300,000 into compliance measures, one of the largest by a crypto company in its position.

CoinList, as per CoinGecko data, is a relatively smaller exchange with a daily volume of around $400,000, mainly in Tether and Solana pairs. This contrasts with larger exchanges like Binance, which records daily volumes in the billions.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master’s degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti