OFAC and CoinList reach $1.2M settlement over Russian sanctions violations

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with the crypto exchange CoinList on Dec. 13.

Over a two-year period ending in May 2022, CoinList processed 989 transactions worth $1.25 million from users who ordinarily resided in Crimea. The agency called this an “apparent violation” of its sanctions related to Russia and Ukraine.

OFAC said that although CoinList had compliance procedures in place during the relevant period, its screening procedures did not recognize users who identified themselves as a member of a non-embargoed country but provided a different address. Some users chose Russia as their country of residence but provided an address in Crimea, a disputed region of Ukraine that was annexed by Russia in 2014, leading to U.S. and international sanctions.

OFAC listed several mitigating factors that led to the current settlement. It noted that CoinList did not receive an OFAC notice in the five years before the first violating transaction. OFAC added that CoinList cooperated with its investigations, noted that the amount involved in the violations represented a small percentage of all transactions, and said that CoinList took remedial measures.

Maximum fine was nearly 300x larger

OFAC stated that it settled with CoinList for approximately $1.2 million. However, the settlement amount is $44,450 less than the amount of the violating transactions: CoinList handled $1,252,280 but will pay a fine of $1,207,830.

Furthermore, OFAC will suspend $300,000 of the settlement amount after CoinList completes its compliance commitments. CoinList will invest that amount in additional sanctions compliance controls as part of the settlement agreement.

The settlement is just a fraction of the maximum civil monetary penalty of $327 million. It is also less than the $3 million base civil monetary penalty recommended under OFAC guidelines. OFAC said that the settlement amount reflects that CoinList’s actions were non-egregious and not voluntarily self-disclosed.

CoinList is a very minor exchange. The platform handled just $350,000 in volume over the past 24 hours, according to data from CoinGecko.