Lithuania's financial regulatory authorities have imposed a remarkable penalty of 9.3 million euros (about $10.1 million) on the cryptocurrency company Payeer for violating sanctions and anti-money laundering regulations. The Bureau for Financial Crime Investigation in Lithuania announced that Payeer facilitated ruble transactions for Russian clients, including transfers from Russian financial institutions under EU sanctions. The bureau also stated that Russian individuals and companies could access services related to cryptocurrency wallets.
Background
In 2023, the Financial Crimes Investigation Service (FNTT) launched an investigation into a company providing virtual currency exchange operator services (VASP). The examination revealed that UAB "Payeer" was established in Lithuania on October 20, 2022, with operations starting on January 17, 2023, following the revocation of its Estonian predecessor's VASP license. The Lithuanian entity was created to continue the activities of the Estonian firm, which were non-compliant with global sanctions.
Violation Details
Over 18 months, UAB "Payeer" breached international sanctions regulations, serving over 213,000 customers and generating revenues exceeding 164 million euros. The platform was fined 8.24 million euros for violating international sanctions and 1.06 million euros for violating anti-money laundering laws.
Trend in Crypto Money Laundering
Chainalysis reported a decrease in the transfer of funds from illicit sources to various services in 2023 to $22.2 billion from $31.5 billion in 2022. This decline may be attributed to the overall reduction in crypto transactions. Notably, transactions associated with money laundering saw a more significant decrease of 29.5% compared to the overall transaction volume's 14.9% drop.
Conclusion
The hefty 9.3 million euro fine on Payeer by Lithuania showcases a firm stance against sanctions and anti-money laundering breaches in the crypto industry. The case reflects the growing regulatory pressure on crypto companies to comply with international sanctions and AML laws.
