The crypto exchange CoinList paid a $1.2 million fine to the United States Office of Foreign Assets Control (OFAC) to settle accusations of allowing users from Crimea, a Ukrainian peninsula annexed by Russia, to use its platform.
89 Accounts Opened from Crimea Detected
OFAC stated in its announcement that CoinList opened 89 accounts for customers who had mostly indicated ‘Russia’ as their country of residence but had used Crimea as their address during account opening. OFAC underscored that the fine was significantly reduced from the potential maximum amount of approximately $327 million due to CoinList’s past compliance with regulations, cooperation, and the small number of transactions carried out through these accounts compared to the exchange’s total transaction volume.
OFAC’s statement also emphasized that “This enforcement action highlights the importance of crypto companies and those involved in emerging technologies incorporating risk-based sanctions compliance into their operational processes, especially companies attempting to provide financial services to a global customer base.”
Despite Russia’s annexation of Crimea in 2014, most countries still recognize the region as part of Ukraine. It is well known that the occupation led to sanctions being imposed on Russia.
CoinList: We Will Invest $300,000 in Compliance Controls
CoinList also released a statement following the development. The crypto exchange mentioned that reaching a settlement with OFAC was seen as a learning opportunity to invest in compliance. The statement said, “Our unwavering commitment to compliance is reinforced by our agreement to invest $300,000 in compliance controls. This is one of the largest investments made by a crypto company of our size.”
According to CoinGecko data, CoinList is a relatively small crypto exchange with a daily trading volume of only $400,000, mostly in USDT and SOL trading pairs. On the other hand, Binance, one of the world’s largest crypto exchanges, generates billions of dollars in daily trading volume. The crypto exchange successfully completed a funding round in October 2021, valuing the company at $1.5 billion.
