Lithuanian Financial Crime Investigation Service fines crypto firm Payeer for sanctions violations

11 Jul 2024, 32 mins ago

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started its operations in Lithuania in January 2023, after its licence for virtual currency exchange operation services was revoked in Estonia.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, 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.

Gherson lawyers have significant experience of advising on UK and international sanctions regimes and can assist you with sanctions compliance or representations before regulatory authorities. We also can assist you with licence applications if needed.

Please do not hesitate to contact us for advice, or send us an e-mail. Don’t forget to follow us on XFacebookInstagram, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2024