CoinList Settles with OFAC for $1.2 Million Over Crimea Sanctions Violations

The Office of Foreign Assets Control (OFAC) of the United States Treasury Department has filed claims against CoinList Markets, a virtual currency exchange, and the company has agreed to pay more than $1.2 million to resolve the allegations. Despite sanctions imposed by the United States against Russia, which seized Crimea in 2014, CoinList continues to execute transactions for clients residing in the Crimea area of Ukraine. This move is a reaction to the fact that Russian sanctions have been imposed.

Between the months of April 2020 and May 2022, CoinList, which has its headquarters in San Francisco, allowed 989 transactions on its platform that were valued over $1.3 million. It was the responsibility of the corporation to implement sanctions compliance processes, which included checking both new and current clients against sanctions lists. During the month of February 2021, more measures were implemented in order to prevent clients from sanctioned areas from gaining access. On the other hand, OFAC brought to light a significant flaw in CoinList's system, which failed to identify individuals who claimed to be citizens of countries that were not subject to an embargo yet gave addresses in Crimea.

When it came to making the settlement, OFAC accepted that there were various mitigating considerations. During the five years prior to the first breach, CoinList had not been sent with an OFAC notification. Additionally, the company had agreed to help with inquiries, and the transactions in question were a very tiny portion of the total activity. Even though the entire value of the transactions that were in violation was $1,252,280, the amount of the settlement, which is $1.2 million, is somewhat less than that. Additionally, it is anticipated that CoinList would spend $300,000 in the enhancement of its compliance-related procedures. As a condition of the settlement agreement, this suspension will take place.

The non-egregious character of the offenses, which CoinList did not willingly self-disclose, is reflected in the settlement, which corresponds to a fraction of the possible maximum civil penalty of $327 million. The business, which is seen as a relatively little trade with a volume of just $350,000 over the course of twenty-four hours, has expressed satisfaction with the result. In order to further demonstrate its dedication to compliance, CoinList has pledged to make major improvements to its compliance processes, control systems, and training.