Payeer Fined €9.3 Million for Sanctions Violations and Money Laundering

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As an analyst with a background in financial regulation and experience following the fintech scene in Europe, I’m deeply concerned by the €9.3 million ($10.1 million) fine imposed on Payeer, a crypto payment company, by Lithuania’s Financial Crime Investigation Service (FNTT). The violation of international sanctions and enabling transactions through EU-sanctioned Russian banks is a serious matter that undermines the integrity of the financial system and exposes it to potential risks.

The Lithuanian Financial Crime Investigation Service (FNTT) has imposed a fine of €9.3 million ($10.1 million) on Payeer, a cryptocurrency payment company, for breaching sanctions regulations and handling substantial sums of money linked to clients from Russia.

Payeer, a platform that simplifies transactions among euros, US dollars, and Russian Rubles, violated rules by processing payments involving EU-prohibited Russian banks.

Payeer provided Russians and businesses with virtual wallets and accounts for handling digital currency, in contravention of international sanctions.

For the past ten years, fintech has flourished as a major industry in Lithuania. Yet, due to concerns over cryptocurrency misuse in money laundering and fraud, the country has revised its regulatory framework for crypto businesses. The Financial Crime Detection and Prevention Center (FNTT) initiated an investigation into Payeer in 2023, uncovering that this company had carried on without a license in Lithuania after being expelled from Estonia.

Based on the findings from the report by The FNTT, it was revealed that Payeer engaged in transactions using Russian rubles with banks subject to sanctions for a prolonged period of more than 1.5 years.

During the timeframe of 2012 to 2015, Payeer managed to amass a customer base of over 213,000 individuals and accumulated total revenues amounting to over €164 million. However, our prolonged neglect of regulatory requirements significantly worsened the situation, ultimately leading to a hefty penalty being imposed on our company.

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2024-07-11 03:48