The Financial Crime Investigation Service (FNTT) announced a two-part fine imposed on Payeer for violating international sanctions (€8.23M) and anti-money laundering laws (€1.06M). The report stated that investigations started in 2023, and found that Payeer allowed transactions in Rubles through Russian banks sanctioned by the European Union.
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According to the Lithuanian agency’s report, Payeer failed to reveal the identities of its clients to ensure that services were not offered to sanctioned individuals, institutions, or countries. The FNTT asserted that the affected accounts had to be closed, the funds disposed of, and their associated economic resources suspended.
Payeer went rogue for nearly 2 years
The FNTT’s investigations established that Payeer’s illegal activities had been ongoing for more than 18 months. The agency revealed that Payeer had acquired approximately 213,000 customers, and the company’s revenue reached more than €164 million during this period.
Lithuania issued a record fine of 9,3 million euros to the crypto exchange Payeer for violating the sanctions on Russia. It allowed Russians to transfer money to sanctioned Russian banks and vice versa.https://t.co/4M92NyVpNE
— Stanimir Dobrev (@delfoo) July 10, 2024
According to the Financial Crime Investigation Service report, Payeer’s inspection and analysis of its information were carried out in 2023. The agency disclosed that the Lithuanian-registered Payeer “UAB” started its operations in 2023 after its Estonian-registered predecessor, Payeer, had its VASP license revoked.
After the FNTT’s International Sanctions Implementation Commission assessed the collated material, it discovered that Payeer UAB had taken over the Payeer.com crypto platform. The report claimed the platform allowed Russian customers to transact with Rubles through EU-sanctioned Russian banks.
Citing the report, the FNTT stated, “In Lithuania, the company was possibly established to continue Payeer’s activities, which are incompatible with international sanctions.”
Payeer’s violations went beyond “the formal” requirements – FNTT
According to the FNTT, Payeer violated “not only the formal but also the essential requirements of the law and regulations.” The agency’s report revealed that Payeer “intentionally” failed to check and determine the identities of its customers to protect its own revenue.
The Financial Crime Investigation Service affirmed that transactions carried out through sanctioned Russian banks were never terminated and that Payeer failed to cooperate or explain its actions, resulting in the €8.236M fine.
The agency added that Payeer’s failure to disclose customer transactions equal to or exceeding €15K to the FNTT was in violation of anti-money laundering laws. The FNTT claimed that the assessment of the nature and extent of this violation warranted the €1.06M fine. The report recognized that “This is so far the record fine imposed by the FNTT for violations of international sanctions.”
The agency pointed out that Payeer’s deficiencies had been recorded in its internal policy and control procedures related to the verification and identification of its customers and beneficiaries. Nonetheless, the Financial Crime Investigation Service assured that Payeer could still appeal the decisions.