Payeer, a crypto payment company, has been fined approximately $10 million by the Lithuanian Financial Crime Investigation Service (FNTT) for violating Anti-Money Laundering (AML) regulations and allowing transfers to sanctioned banks.
Details of the Fine
On July 7, the FNTT announced that it had imposed fines totaling 9.29 million euros (around $10 million) on Payeer. This is the largest fine ever imposed on a virtual asset service provider in Lithuania. The fines were divided into two parts:
- 8.23 million euros ($8.91 million) for violations of international sanctions.
- 1.06 million euros ($1.15 million) for breaches of the Law on the Prevention of Money Laundering and Terrorist Financing (PPTFP).
Investigation and Findings
The FNTT began investigating Payeer in 2023. Initially registered and licensed in Estonia, Payeer’s license was revoked on January 17, prompting the company to continue operations from its headquarters in Lithuania. During the investigation, the FNTT found that Payeer failed to adequately verify customer identities and allowed transfers in Russian rubles through sanctioned Russian banks, in violation of European Union sanctions.
Scope and Impact
The FNTT revealed that Payeer had facilitated these transactions for over 1.5 years. During this period, the company had at least 213,000 customers and generated over 164 million euros in revenue. Despite attempts by the FNTT to engage with Payeer and request cessation of the sanctioned transactions, the company did not cooperate or provide clarifications.
Payeer’s Operations
Payeer is a crypto exchange and e-commerce payment service that allows users to exchange euros, US dollars, and Russian rubles, as well as various cryptocurrencies. It also supports withdrawals via debit cards and offers an API for merchants to accept cryptocurrency payments for goods and services.
Payeer has the right to appeal the FNTT’s decision. As of the time of publication, Payeer had not responded to requests for comment.
Broader Regulatory Crackdown
This fine is part of a broader regulatory crackdown on crypto exchanges that fail to comply with AML regulations. Last November, Binance settled with the US Department of Justice (DOJ) for $4.3 billion over similar accusations. In March, the DOJ charged KuCoin with failing to prevent money laundering, although KuCoin claimed it strictly adhered to compliance standards.
