CoinList, a California-based virtual currency exchange, has agreed to a settlement with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

This agreement comes in light of potential violations involving transactions processed for users in Crimea. The exchange has consented to pay $1,207,830 to resolve its possible civil liability.

CoinList Settles Regulatory Dispute with US Officials

Between April 2020 and May 2022, CoinList reportedly processed 989 transactions for users in Crimea.

This act seemingly breached OFAC’s Russia/Ukraine sanctions. Although CoinList maintained sanctions compliance measures, including customer screening and transaction monitoring, their procedures did not flag users who misrepresented their residence.

Image: Bloomberg

This misrepresentation led to the opening of 89 accounts for users listing “Russia” as their country but providing addresses in Crimea. The settlement amount considers various factors, including OFAC’s assessment that the violations were not severe.

CoinList Confronts Increasing Fines Amid Exchange Difficulties

OFAC could have imposed a substantially higher penalty, up to $327,306,583, but considered several factors.

These included CoinList’s lapse in exercising due diligence in sanctions compliance and the exchange’s awareness of potential violations.

However, mitigating factors influenced the decision, such as CoinList’s cooperation in the investigation, lack of prior penalties, and the minimal percentage of total transactions these violations represented.

CoinList Implemented Significant Remedial Measures

CoinList has since taken significant steps to remedy the situation. They have enhanced their screening protocols and compliance staff.

As part of the settlement agreement, CoinList will also invest $300,000 in improved sanctions compliance controls and suspend an additional $300,000 of the settlement amount to ensure compliance.

Read the full recent statement of the apparent violations here.