Payeer fined €9.3m for sanctions evasion

Lithuania has imposed a €9.3 million fine on local cryptocurrency firm Payeer for sanctions violations and anti-money laundering breaches, highlighting regulatory actions against financial misconduct.

Points

• Payeer fined €9.3 million for sanctions violations and AML breaches.
• Most of Payeer’s 213,000 clients were based in Russia.
• Payeer facilitated fund transfers to and from Russian banks.
• Estonia previously revoked Payeer’s license due to similar issues.

Payeer’s Sanctions Violations

Lithuania’s Financial Crimes Investigation Service （FNTT） has fined local cryptocurrency firm Payeer €9.3 million （$10.07 million） for facilitating the transfer of funds to and from Russian banks, violating sanctions. This fine includes €8.2 million for sanctions violations and €1.1 million for anti-money laundering （AML） breaches.

Client Base and Activities

Payeer had 213,000 clients, most of whom were based in Russia. The company allowed these clients to transfer funds into and out of the country for over a year, concealing their identities and bypassing AML checks. Russia-based individuals and legal entities also received account management services, crypto wallet use, and custody from Payeer.

Since launching its operations in January 2023, Payeer reportedly accrued revenues of over 164 million euros （$177.4 million）.

Regulatory Actions and License Revocation

Payeer’s launch in Lithuania followed the revocation of a license issued in Estonia to another company operating under the same name. This revocation was due to multiple blockchain-based services and crypto exchange platforms violating regulatory standards, including Estonia-based Bitfingroup OÜ and peer-to-peer （P2P） platform Bitpapa.

Explanation

• Sanctions and AML Breaches: Payeer’s actions violated international sanctions and AML regulations, leading to significant fines.
• Regulatory Actions: The fines and license revocations reflect increasing regulatory scrutiny and enforcement against financial misconduct in the cryptocurrency industry.
• Market Impact: Such regulatory actions highlight the importance of compliance and the potential consequences of violating financial regulations.