The Lithuanian Financial Crime Investigation Service (FNTT) has imposed a record fine of €8.23 million on the crypto processing platform Payeer for failing to comply with international sanctions.
Additionally, the company will pay €1.06 million for violating the Law on the Prevention of Money Laundering and Terrorist Financing (PPTFPĮ).
Operating as a virtual asset service provider (VASP), the firm came under the agency’s scrutiny in 2023. FNTT officials conducted an inspection and analyzed the information.
They noted that Payeer was registered in Lithuania in 2022. The platform Payeer.com began its actual operations a year later, after the license of its namesake predecessor in Estonia was revoked. FNTT suspects the re-registration was intended to continue business incompatible with the sanctions regime.
Based on the collected materials, the Service determined that Payeer, through its crypto platform, allowed clients, mainly from Russia, to conduct transactions in Russian rubles by transferring them from banks under EU sanctions.
The company provided Russian individuals and legal entities with access to services for managing crypto wallets and storing assets.
“It has been established that the firm has been violating international sanctions legislation for more than a year and a half. During this period, Payeer served at least 213,000 clients, and revenue exceeded €164 million,” the FNTT statement said.
According to agency specialists, the company violated “substantial legal and regulatory requirements” by not identifying users subject to restrictions to “avoid losing a significant portion of revenue.” Payeer also did not cease operations with sanctioned Russian banks.
FNTT assessed the violations as “serious.” The company did not cooperate with the agency and refused to provide explanations, resulting in a record fine.
In the context of PPTFPĮ requirements, the firm did not notify FNTT of virtual currency transactions exceeding €15,000, failed to comply with client identification and risk assessment procedures, and did not meet reporting and information provision requirements.
Payeer still has the option to appeal the decision.
Earlier in 2023, journalists uncovered dozens of cases of fraud, money laundering, sanctions evasion, and illegal financing of criminal organizations through crypto companies in Lithuania and Estonia.