Crypto Exchange CoinList to Pay $1.2 Million in Settlement With Treasury Department

The Treasury Department’s Office of Foreign Assets Control (OFAC) said the penalty related to 989 transactions that were processed for CoinList users between April 2020 and May 2022.

CoinList, which offers a crypto exchange and coin listing services, has agreed to pay $1.2 million to settle a potential civil case for allegedly violating Russia/Ukraine sanctions imposed by the U.S. Department of the Treasury’s enforcement arm, the agency announced on Wednesday.

The Treasury Department’s Office of Foreign Assets Control (OFAC) said the penalty related to 989 transactions that CoinList processed for 89 users between April 2020 and May 2022. OFAC said that CoinList compliance measures failed to identify these users, almost all of whom said they were residents of Russia but also provided addresses in Crimea, which Russia annexed in 2014 and has been a hot spot in the war between it and Ukraine.

“Because ‘Russia’ was provided in the country-of-residence field in these instances, CLM’s [CoinList] screening protocols failed to recognize that ‘Crimea’ or a city name in Crimea, provided in another data field, indicated likely residence in Crimea,” the Treasury  announcement said.

Russia has been the target of financial and other sanctions from the U.S. and its Western allies since its February, 2022, unprovoked invasion of Ukraine. In May, the OFAC unveiled a massive list of new sanctions against Russian companies and individuals trying to transfer money from the country. Roughly seven months earlier, European regulators tightened restrictions on Russian crypto investments.

While the Treasury Department said that CoinList described the CoinList violations as “non-egregious,” it said that the company did not self-report. CoinList’s screening measures were supposed to reject an application “if a user presented an identification card from, or provided a physical address in a comprehensively sanctioned jurisdiction.”

“CLM knew or had reason to know it was conducting transactions on behalf of persons who
were likely to be ordinarily resident in Crimea,” the Treasury Department said, adding “CLM conferred economic benefits to Crimea by processing 989 transactions totaling $1,252,280 over two years. There is no indication the transactions would have been licensable or involved humanitarian activity.”

In comments announcing the enhancement of sanctions in May, Treasury Secretary Janet Yellen noted the importance of the U.S.-Europe coalition degrading Russia’s war capabilities. “Our collective efforts have cut Russia off from key inputs it needs to equip its military and is drastically limiting the revenue the Kremlin receives to fund its war machine,” she said.