TLDR
- Payeer, a crypto payment company, was fined €9.3 million ($10 million) by Lithuania’s Financial Crime Investigation Service (FNTT).
- The fine was for violating anti-money laundering regulations and allowing transfers to sanctioned Russian banks.
- Payeer had about 213,000 customers, mostly from Russia, and generated over €164 million in revenue.
- The company continued operating in Lithuania after losing its license in Estonia in January 2023.
- This fine is the largest ever imposed on a virtual asset service provider in Lithuania.
Lithuania’s Financial Crime Investigation Service (FNTT) has imposed a record-breaking fine of €9.3 million (approximately $10 million) on crypto payment company Payeer.
The penalty, announced on July 7, 2024, marks the largest ever imposed on a virtual asset service provider in the country.
Payeer, which offers cryptocurrency exchange and e-commerce payment services, was found to have violated anti-money laundering (AML) regulations and allowed customers to transfer money to banks sanctioned by the European Union.
The company enables users to exchange between euros, US dollars, and Russian rubles, as well as various cryptocurrencies. It also provides withdrawal services via debit cards and an API for merchants to accept crypto payments.
The FNTT’s investigation into Payeer began in 2023, revealing a complex web of regulatory evasion. The company had originally been registered and licensed in neighboring Estonia.
However, after losing its license there on January 17, 2023, Payeer continued its operations from a headquarters registered in Lithuania.
According to the FNTT, Payeer failed to adequately identify its customers’ identities, a crucial requirement in preventing money laundering and terrorist financing.
The company allowed transactions in Russian rubles through banks sanctioned by the European Union. These activities reportedly continued for over 1.5 years.
The scale of Payeer’s operations was significant. The FNTT reported that the company had at least 213,000 customers, primarily from Russia.
During its operational period, Payeer generated revenue exceeding €164 million ($177.4 million). The company’s ability to conceal client identities enabled users to bypass AML checks while moving Russian rubles.
The €9.3 million fine imposed on Payeer consists of two parts. The larger portion, €8.23 million ($8.91 million), addresses “violations of international sanctions.”
The remaining €1.06 million ($1.15 million) is for “violations of the Law on the Prevention of Money Laundering and Terrorist Financing (PPTFP).”
The FNTT stated that it had attempted to contact Payeer and persuade the company to cease allowing sanctioned transactions. However, according to the agency, Payeer “did not cooperate, did not provide clarification.”
