The US Treasury Department’s Office of Foreign Assets Control (OFAC) announced a settlement with the cryptocurrency exchange CoinList on December 13.
Over a two-year period ending in May 2022, CoinList processed 989 transactions worth $1.25 million from users normally resident in Crimea. The agency called this an “apparent violation” of its sanctions on Russia and Ukraine.
OFAC said that while CoinList had compliance procedures in place during the relevant period, its screening procedures did not recognize users who identified themselves as members 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 had not received an OFAC notice in the five years prior to the first infringing transaction. OFAC added that CoinList was cooperating with its investigations, indicated that the amount involved in the violations represented a small percentage of all transactions, and said CoinList was taking corrective action.
The maximum fine was almost 300x greater.
OFAC stated that it had settled with CoinList for approximately $1.2 million. However, the settlement amount is $44,450 less than the amount of the infringing transactions: CoinList settled $1,252,280, but will pay a $1,207,830 fine.
Additionally, OFAC will suspend $300,000 of the settlement amount after CoinList completes its compliance obligations. CoinList will invest that amount in additional sanctions compliance reviews as part of the settlement agreement.
The settlement is just a fraction of the maximum civil penalty of $327 million. It is also less than the $3 million base civil fine recommended under OFAC guidelines. OFAC said the settlement amount reflects that CoinList’s actions were not egregious and were not voluntarily self-disclosed.
CoinList is a very small exchange. According to data from CoinGecko, the platform only processed $350,000 in volume in the last 24 hours.