Lithuania Fines Crypto Payment Company Payeer $10 Million for Sanctions Violations

Lithuania’s Financial Crime Investigation Service （FNTT） has fined crypto payment company Payeer $10 million for violating Anti-Money Laundering regulations and facilitating transactions with sanctioned banks. This article examines the details and implications of this significant regulatory action.

Points

• Payeer fined $10 million by Lithuania’s FNTT for AML and sanctions violations.
• Payeer facilitated transactions in Russian rubles with sanctioned banks.
• The company’s license was previously revoked in Estonia.
• Over 213,000 customers and $164 million in revenue involved.
• Payeer has the right to appeal the decision.

Lithuania’s Financial Crime Investigation Service （FNTT） has imposed a substantial fine of 9.29 million euros （approximately $10 million） on the crypto payment company Payeer for violating Anti-Money Laundering （AML） regulations and facilitating transactions with sanctioned banks.

Violations and Regulatory Actions

According to the FNTT’s announcement, Payeer facilitated transactions in Russian rubles and allowed transfers to be made through sanctioned Russian banks. The investigation revealed that Payeer had continued operations in Lithuania after its Estonian license was revoked in January 2023. The company was found to have inadequately identified its customers’ identities and allowed sanctioned transactions to occur for over 18 months.

Scale of Operations

During this period, Payeer served over 213,000 customers and generated more than 164 million euros in revenue. Despite attempts by the FNTT to contact Payeer and urge it to cease these transactions, the company did not cooperate, leading to the imposition of fines.

Breakdown of Fines

The fines imposed on Payeer consist of two parts:
– 8.23 million euros （$8.91 million） for violations of international sanctions.
– 1.06 million euros （$1.15 million） for violations of the Law on the Prevention of Money Laundering and Terrorist Financing （PPTFP）.

Implications for the Crypto Industry

This case underscores the increasing regulatory scrutiny on crypto firms, particularly concerning adherence to international sanctions and AML laws. It highlights the importance of robust compliance mechanisms to avoid legal repercussions and maintain the integrity of financial systems.

Conclusion

The significant fine imposed on Payeer by Lithuania’s FNTT serves as a stark reminder of the critical need for regulatory compliance in the cryptocurrency industry. As regulatory bodies worldwide tighten their oversight, crypto firms must ensure they adhere to AML and sanctions regulations to foster a secure and trustworthy market environment.

Explanation

• Regulatory Violations: Payeer facilitated transactions with sanctioned banks and failed to comply with AML regulations, leading to substantial fines.
• Operational Scale: The company served over 213,000 customers and generated significant revenue during the period of non-compliance.
• Compliance Importance: The case highlights the need for robust compliance mechanisms in the crypto industry to avoid legal repercussions and maintain market integrity.