CoinList, a US cryptocurrency exchange, pays USD 1.2 million for violating sanction facilitation claims by OFAC. On December 13th, OFAC announced that Coinlist processed about 989 orders meant for customers of Crimea, a Russian occupation peninsula, between April 2020 and March 2022.
While OFAC categorized the apparent sanctions violations as “non-egregious,” it emphasized that CoinList did not voluntarily disclose these actions. The crux of the matter lay in CoinList’s screening procedures, which failed to identify users claiming to be residents of non-embargoed countries but providing Crimean addresses. Specifically, OFAC highlighted that CoinList opened 89 accounts for customers who declared “Russia” their country of residence but listed addresses in Crimea.
OFAC stated that CoinList either “knew or had reason to know” that these transactions likely involved residents of Crimea, thereby violating U.S. sanctions and providing economic benefits to the region. Despite this, CoinList demonstrated cooperation with U.S. officials throughout the investigation. Notably, the volume of transactions that ran afoul of sanctions represented only a small percentage of CoinList’s overall transaction volume.
Russian soldiers invaded the territory of Crimea, prompting then-President Barack Obama to enforce sanctions. These measures were intended to pave the way for more serious decisions regarding the invasion. In February 2022, following Russia’s brazen invasion of Ukraine, authorities implemented carefully chosen new sanctions.
CoinList: OFAC Scrutiny, Compliance Emphasis Grows
CoinList joins other U.S. cryptocurrency firms that have faced OFAC enforcement actions over similar issues. Poloniex settled for $7.6 million in May due to over 65,000 apparent violations, including those related to Crimea. Additionally, Binance’s $4.3 billion settlement with U.S. authorities included allegations of money laundering, fraud, and sanctions violations.
The crypto exchanges face heightened surveillance, emphasizing potent compliance in a world under global sanctions. Compliance with anti-money laundering laws, working with regulators, and technological investments are important when dealing with international complications regarding legitimacy in the digital asset realm.
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