CoinList Resolves Russian Sanctions Allegations for $1.2M

Wow! Crypto exchange CoinList has made headlines by paying $1.2 million to settle U.S. Office of Foreign Assets Control allegations. It was alleged that the exchange allowed users in Crimea, a Ukrainian peninsula annexed by Russia, to use the platform.

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 OFAC notice reads. “Screening protocols failed to recognize that ‘Crimea’ or a city name in Crimea, provided in another data field, indicated likely residence in Crimea.”

In 2014, Russia invaded Crimea which led to most countries still seeing the region as part of Ukraine. The occupation led to the imposition of sanctions on Russia.

However, the fine imposed on CoinList was much 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, according to OFAC.

OFAC said, “This enforcement action further emphasizes the importance for virtual currency companies and those involved in emerging technologies to incorporate risk-based sanctions compliance into their business functions, especially when the companies seek to offer financial services to a global customer base.”

In response, CoinList stated that it is taking this as a learning opportunity to invest in compliance. “Our unwavering commitment to compliance is reinforced through our agreement to invest $300,000 into compliance controls – one of the largest investments made by a crypto company in our position,” the exchange said in a published statement.

CoinList, according to CoinGecko data, is a relatively small exchange with just $400,000 in daily volume, mostly with Tether and Solana pairs, as compared to Binance, the biggest exchange, which records daily volumes of billions of dollars.

In October 2021, the exchange closed a $100 million funding round, valuing the company at $1.5 billion.

Edited by Sheldon Reback.

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