CoinList, a U.S.-based cryptocurrency exchange, has reached a settlement of $1.2 million with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) after allegations arose concerning its facilitation of transactions that violated sanctions.
According to a notice from OFAC on December 13, CoinList was found to have processed 989 transactions between April 2020 and May 2022 for users in Crimea, a region previously part of Ukraine and currently under Russian occupation. OFAC highlighted that these apparent sanctions breaches were not voluntary self-disclosures but resulted from screening procedures that failed to identify users claiming residency in non-sanctioned countries but providing Crimean addresses.
Despite most users specifying their residence as "Russia," they provided addresses within Crimea when opening accounts, leading to a total of 89 accounts being created under these circumstances. OFAC emphasized that CoinList had the knowledge or should have known that these transactions were likely conducted by Crimean residents, thus violating U.S. sanctions and providing economic benefits to the region.
Nevertheless, OFAC noted that these apparent sanctions breaches constituted only a small fraction of CoinList's overall trading volume. CoinList cooperated with U.S. officials during the investigation, and while the violations were acknowledged, they accounted for a minimal portion of the exchange's overall activities.
Since the imposition of sanctions on Crimea in response to Russia's annexation in 2014 and further sanctions after Russia's military invasion of Ukraine in 2022, various U.S.-based cryptocurrency companies have faced similar enforcement actions from OFAC. Earlier examples include Poloniex's $7.6 million settlement involving over 65,000 apparent violations of multiple sanctions, including those targeting Crimea, and Binance's $4.3 billion settlement over money laundering and fraud charges, which also involved clear breaches of sanctions.
