The Lithuanian Financial Crime Investigation Service (FNTT) imposed a record sanction of €9.3 million (~$10M) on Payeer, a virtual asset service provider.
The Financial Crime Investigation Service (FNTT) has imposed a two-part fine on Payeer for violating international sanctions (€8.23M) and anti-money laundering regulations (€1.06M). The investigation, which commenced in 2023, revealed that Payeer permitted transactions in Rubles through Russian institutions that were sanctioned by the European Union.
According to the Lithuanian agency’s report, Payeer neglected to disclose the identities of its clients in order to prevent the provision of services to sanctioned individuals, institutions, or countries. In its claim, the FNTT required the closure of the affected accounts, the disposal of the funds, and the suspension of the associated economic resources.
The FNTT’s investigations revealed that Payeer’s unlawful activities had persisted for more than 18 months. The agency disclosed that Payeer had acquired approximately 213,000 consumers and generated over €164 million in revenue during this time.
In 2023, Payeer conducted an inspection and analysis of its information, as mentioned in the Financial Crime Investigation Service report. The agency said that the Payeer “UAB” company began doing business in Lithuania in 2023, after its Estonian-based predecessor, Payeer, had its VASP license taken away.
The FNTT’s International Sanctions Implementation Commission discovered that Payeer UAB had acquired the Payeer.com crypto platform after evaluating the collected material. The report stated that the platform enabled Russian consumers to conduct transactions with Rubles through Russian institutions that were sanctioned by the EU.
Citing the report, the FNTT said, “It’s possible that the company was set up in Lithuania to continue Payeer’s actions, which are against international bans.”
The FNTT said that Payeer broke “not only the official but also the vital standards of the law and rules.” In an effort to safeguard its revenue, Payeer “intentionally” neglected to verify and authenticate its customers’ identities, according to the agency’s report.
The Financial Crime Investigation Service confirmed that transactions conducted through sanctioned Russian institutions were never terminated and that Payeer neglected to cooperate or provide an explanation for its actions, which led to the €8.236M fine.
The agency further stated that Payeer’s neglect to disclose customer transactions equal to or exceeding €15K to the FNTT was a violation of anti-money laundering laws. The FNTT contended that the €1.06M sanction was well-deserved in light of the assessment of the nature and severity of this violation. The FNTT has imposed a record fine for violations of international sanctions, as acknowledged in the report.
The agency emphasized that Payeer’s internal policy and control procedures regarding the verification and identification of its customers and beneficiaries had documented its deficiencies. Nevertheless, the Financial Crime Investigation Service guaranteed that Payeer could continue to appeal the decisions.
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