The Lithuanian Financial Crimes Investigation Service (FCIS) has made headlines by imposing a record fine on the Payeer crypto exchange for violating international sanctions. Payeer, a licensed Virtual Asset Service Provider (VASP) in Lithuania, was fined €9.3 million, marking the largest penalty ever issued by the FCIS for such offenses.
The fine includes €8.23 million for non-compliance with international sanctions and €1.06 million for breaching Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws. Investigations conducted by the FCIS revealed that Payeer allowed transactions in Russian roubles and provided crypto services to Russian banks and individuals sanctioned by the European Union (EU) for over 18 months. During this period, Payeer had over 213,000 customers, mostly Russian, and generated more than €164 million in revenue.
Further investigations uncovered that Payeer also violated AML/CFT laws by failing to notify the FCIS of crypto transactions of €15,000 or more and had deficiencies in internal controls, customer risk assessments, and management protocols. The company has the option to appeal the decision.
Payeer was founded in 2012 in Moscow by Russian national Evgenia Kosolapova. After being liquidated in 2015, Payeer operators were registered in various countries before re-registering in Lithuania in January 2023. The penalties imposed on Payeer highlight the seriousness with which Lithuanian authorities approach compliance with international sanctions.
In related news, Tether announced plans to freeze wallets using its currency, USDT, to bypass US sanctions on Venezuelan oil exports. This move underscores the ongoing efforts to combat sanction evasion in the crypto industry.
