In a groundbreaking move, the Lithuanian Financial Crime Investigation Service (FNTT) has imposed a staggering €9.29 million ($10 million) fine on crypto payment company Payeer. This record-setting penalty is due to Payeer’s alleged violations of Anti-Money Laundering (AML) regulations and its facilitation of transactions with sanctioned banks.
Payeer, known for its crypto exchange and e-commerce payment services, is under scrutiny for failing to adhere to AML protocols and for permitting transactions in Russian rubles to sanctioned Russian banks. According to the FNTT’s July 7 announcement, the company continued these activities despite the European Union’s sanctions.
The FNTT’s investigation, which began in 2023, revealed that Payeer initially operated under an Estonian license, which was revoked on January 17. Subsequently, the company shifted its operations to Lithuania. However, it continued to violate AML laws by failing to properly verify customer identities and allowing prohibited transactions.
The agency’s findings indicated that Payeer facilitated these transactions for over 1.5 years, serving approximately 213,000 customers and generating over €164 million in revenue. Despite repeated warnings, Payeer did not cease its activities or cooperate with the FNTT.
The imposed fines are divided into two parts: €8.23 million ($8.91 million) for violations of international sanctions and €1.06 million ($1.15 million) for breaches of AML laws. This unprecedented penalty underscores the Lithuanian government’s stringent stance on compliance within the crypto sector.
This fine against Payeer is part of a broader international crackdown on crypto exchanges that fail to comply with AML regulations. Last November, Binance settled with the U.S. Justice Department for $4.3 billion over similar accusations. Similarly, in March, KuCoin faced charges from the DOJ for inadequate AML measures.
Payeer has the right to appeal the decision. As of now, the company has not responded to requests for comment.
This landmark penalty serves as a stern warning to other crypto exchanges about the importance of strict compliance with international financial regulations.
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