CoinList pays $1.2 million to settle with U.S. regulators over sanctions violations
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CoinList pays $1.2 million to settle with U.S. regulators over sanctions violations
Mitigating factors include CoinList's cooperation with the investigation, no prior history of penalties, and the relatively small proportion of clearly violative activity in relation to total trading volume.
Navigating Web3 tides with focused insightsSource: BeInCrypto
Compiled by: Blockchain Knight
CoinList has reached a settlement with the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) over potential violations related to transactions involving users from the Crimean Peninsula.
The settlement statement said: "California-based cryptocurrency exchange CoinList has agreed to pay $1,207,830 to settle its potential civil liability."
According to a recent announcement, the apparent violations occurred between April 2020 and May 2022. CoinList allegedly processed 989 transactions for users who claimed to reside in the Crimean Peninsula, clearly violating OFAC’s sanctions on Russia/Ukraine.
Despite implementing sanction compliance measures such as customer screening and transaction monitoring, CoinList’s procedures failed to detect users who falsely declared residence in non-sanctioned countries while providing addresses located within the Crimean Peninsula.
This oversight led to the creation of 89 user accounts that designated “Russia” as their country of residence but provided addresses in Crimea.
The $1.2 million settlement amount considered various factors, including OFAC’s determination that the violations were not egregious.
OFAC noted that the statutory maximum penalty could have been significantly higher—up to $300 million. However, it reportedly considered aggravating factors such as CoinList’s failure to exercise due diligence in complying with sanctions requirements.
Additional aggravating factors included awareness of potential violations and harm to the policy objectives of the Ukraine- and Russia-related Sanctions Regulations.
Mitigating factors included CoinList’s cooperation with the investigation, absence of prior penalties, and the relatively small proportion of apparent violations compared to total transaction volume.
CoinList also undertook significant remedial actions, enhancing its screening protocols and compliance staffing.
In addition, the exchange agreed to suspend payment of $300,000 of the settlement amount, contingent upon continued compliance, which is part of the settlement agreement.
Furthermore, CoinList committed to investing $300,000 to strengthen its sanctions compliance controls.
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