Lithuania Fines Payeer for Sanctions Violations
Lithuania has taken a firm stance against sanctions evasion, imposing a substantial €9.3 million ($10.07 million) fine on local cryptocurrency firm Payeer. This penalty, reported by Reuters on Wednesday, highlights the country’s ongoing efforts to enforce strict compliance with international sanctions and anti-money laundering (AML) regulations.
FNTT Imposes Significant Penalty
The Financial Crimes Investigation Service (FNTT), Lithuania’s financial crimes watchdog, has levied the fine on Payeer for facilitating the transfer of funds to and from Russian banks. The total penalty includes €8.2 million for sanctions violations and an additional €1.1 million for breaches of AML regulations.
Majority of Clients Based in Russia
Authorities have revealed that most of Payeer’s 213,000 clients are based in Russia. Over the past year, these clients have been able to transfer funds into and out of Russia, evading international sanctions. The FNTT reported that Payeer concealed these clients’ identities, enabling them to bypass AML checks while transferring Russian rubles.
Services Provided to Sanctioned Entities
In addition to fund transfers, Russia-based individuals and legal entities received various services from Payeer. These included account management, the use of crypto wallets, and custody services. The company’s activities have raised significant concerns among regulators about the potential for further sanctions evasion.
Launch and Financial Performance
Payeer began its operations in January 2023 and quickly grew its client base, mainly from Russia. The FNTT noted that the company has accrued revenues exceeding 164 million euros ($177.4 million) since its inception. This rapid growth and substantial revenue have drawn increased scrutiny from regulatory authorities.
Historical Context of AML Fines
In a report released in May, the FNTT disclosed that Lithuania experienced over 98,000 suspicious money transactions in 2023. AML fines for that year reached a total of 900,000 euros, underscoring the country’s ongoing battle against financial crimes.
License Revocation in Estonia
Payeer’s operations in Lithuania followed the revocation of a similar license in Estonia for another company operating under the same name. This move by Estonian authorities further illustrates the regional crackdown on entities involved in sanctions evasion.
US Treasury Blacklists Entities
In March of this year, the US Department of the Treasury, through its Office of Foreign Assets Control (OFAC), blacklisted several entities for aiding sanctions evasion in Russia. Among the blacklisted entities were multiple blockchain-based services and cryptocurrency exchange platforms, including Estonia-based Bitfingroup OÜ and the peer-to-peer platform Bitpapa.
