On 10 July 2024, the Lithuanian Financial Crime Investigation Service (FCIS) reported that it has fined EUR 9.3m the operator of virtual currencies, Payeer, for violation of international sanctions and AML legislation. (Press release)
According to FCIS, UAB Payeer, registered in Lithuania in 2022, was fined for EUR 8.23m for sanctions violations and EUR 1.06 m for violations of the Law on the Prevention of Money Laundering and Terrorist Financing. It was established that UAB Payeer started its operations in Lithuania in January 2023, after its licence for virtual currency exchange operation services was revoked in Estonia.
UAB Payeer, the owner of the cryptocurrency platform Payeer.com, allowed its customers, mostly from Russia, to carry out transactions in Russian rubles by transferring money from EU sanctioned Russian banks. Russian individuals and legal entities were also allowed to receive cryptocurrency wallet, account management or storage services.
FCIS found that UAB Payeer has had over 213,000 customers and generated revenue of more than EUR 164m since the start of its operations in 2023. UAB Payeer failed to implement proper measures allowing identification of their customers and to ensure that no services were provided to sanctioned clients. Transactions conducted via sanctioned banks were not terminated.
FCIS stated that the lack of compliance measures was deliberate, and the breaches were serious. The company did not collaborate with authorities and did not provide an explanation to their actions.
It was further established that UAB Payeer did not notify FCIS about transactions equal or in excess of EUR 15,000 and had serious deficiencies in their internal policy and controls procedures related to identification and verification of their clients and beneficiaries, risks assessment and risk management.
The imposed fine is a record for any fines imposed by FCIS for sanctions violations.
UAB Payeer has an opportunity to appeal FCIS’s decision.
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