CoinList Pays $1.2M to Settle OFAC's Russian Sanctions Allegations

• CoinList Pays $1.2 Million in Settlement Over OFAC Allegations
• User Accounts in Crimea
• Russian Annexation and Sanctions
• The Settled Fine
• OFAC's Emphasis on Compliance for Crypto Companies
• CoinList's Response and Future Compliance Efforts
• CoinList's Market Position and Recent Funding

CoinList Pays $1.2 Million in Settlement Over OFAC Allegations

Crypto exchange CoinList has settled allegations by the U.S. Office of Foreign Assets Control (OFAC) for $1.2 million. The allegations were centered around CoinList's allowance of users in Crimea, a Ukrainian peninsula annexed by Russia, to utilize their platform.

User Accounts in Crimea

According to the OFAC notice, 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. The screening protocols of the platform failed to recognize that 'Crimea', or a city name in Crimea indicated a likely residence in the disputed region.

Russian Annexation and Sanctions

Russia's invasion of Crimea in 2014 is still not recognized by most countries, who view the region as a part of Ukraine. This annexation led to the imposition of sanctions on Russia, complicating the situation for businesses like CoinList.

The Settled Fine

OFAC stated that the fine imposed on CoinList was significantly lower than the maximum potential fine of nearly $327 million. This reduction was attributed to CoinList's past compliance, cooperation, and the small number of transactions involved in comparison with the total volume of the exchange.

OFAC's Emphasis on Compliance for Crypto Companies

OFAC emphasized the importance of crypto companies adopting risk-based sanctions compliance into their business functions, particularly when providing financial services to a global customer base. This enforcement action underlines the critical nature of regulatory compliance in the rapidly evolving crypto market.

CoinList's Response and Future Compliance Efforts

CoinList expressed its intent to use this incident as a learning opportunity to further invest in compliance. The crypto exchange committed to investing $300,000 into compliance controls, a significant commitment for a crypto company in their position.

CoinList's Market Position and Recent Funding

Despite being a relatively small exchange, with daily volumes of just $400,000 mostly in Tether$1.000 -0.12% and Solana$104 5.03% pairs, CoinList recently raised $100 million in a funding round in October 2021. This valued the company at an impressive $1.5 billion.

Edited by Jonathan Stoker