Lithuania Imposes a €9.3 Million Fine on Payeer for Breaching AML Regulations and Sanction Evasion

Payeer, a cryptocurrency payment provider, was charged with €9.3 million ($10.07 million) by the Financial Crimes Investigation Service (FNTT) of Lithuania for violating Anti-money laundering (AML) regulations and allowing money exchange to sanctioned banks in Russia.

Event History and violation of AML regulations

Payeer offers different services like e-commerce payment solutions and bitcoin exchange methods. It permitted money transfers to and from sanctioned Russian banks by the European Union.

The total fine was €9.3 million, €8.2 million for sanctions evasion, and €1.1 million for breaching AML regulations.

Detailed Results of the Investigation

The FNTT started to investigate in 2023 and demonstrated that Payeer permitted his 213,000 customers, mostly the majority from Russia, to transfer money without going through proper AML checks.

Remarks of Financial Crimes Investigation Service

Furthermore, the Financial Crimes Investigation Service (FCIS) declared in a statement “to carry out transactions in Russian rubles by transferring them from European Union-sanctioned Russian banks” on Tuesday, 9 July 2024.

Moreover, the service added that Russian people and legal companies were “given the opportunity to receive cryptocurrency wallet, account management, or storage services.”

The lack of AML regulations made it easy for Russian money to pass through sanctioned banks without being noticed and evade legal obligations and international sanctions.

The company provided handling accounts, custody services, and a crypto wallet service to Russian people. According to reports, these operations lasted over a year, and during this duration, Payeer earned revenue of approximately €164 million ($177.4 million).

Read Also 

• EU Parliament Revises Policy On Sanctions that Include Digital Assets Controls
• Hong Kong’s JPEX Fraud: Regulatory Delays In Detecting Massive Crypto Fraud 
• Casinos And Cryptocurrency: East Asia And Southeast Asia Are Dominant Spots Of Money Laundering,
• Underground Banking As Well As Cyber Fraud

New Licensing Plan for Crypto Firms in the EU

The Baltic country is a member of the EU, and its currency is the euro. Over the past ten years, it has become a famous place for startups in financial technology.

However, now officials are trying to reduce the number of cryptocurrencies by introducing a new license system.

This plan has been designed to stop people from using digital currencies to commit money laundering or cheating investors.

Regulatory Attempts and Payeer’s Response

As per the report, The FNTT has discussed the concern with Payeer focused on putting a stop to these transaction-sanctioned banks.

However, Payeer has not given any explanation or stopped their operations. The lack of AML regulation has worsened due to the failure to collaborate with the relative regulatory bodies.