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Lithuanian Regulator Slaps Payeer with Record Fine for Sanctions Violations

Key Takeaways

  • The Lithuanian Financial Crimes Investigation Service (FCIS) fined Payeer €9.3 million for violating international sanctions and AML/CFT laws;
  • Payeer allowed transactions with Russian roubles and provided crypto services to EU-sanctioned Russian banks and individuals;
  • The company can appeal the fine.
Lithuanian Regulator Slaps Payeer with Record Fine for Sanctions Violations

The Lithuanian Financial Crimes Investigation Service (FCIS) has imposed 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, the largest penalty ever issued by the FCIS for such offenses.

According to an FCIS press release, the fine includes €8.23 million ($10.1 million) for non-compliance with international sanctions and €1.06 million ($1.15 million) for breaching Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws.

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Investigations conducted by the FCIS throughout 2023 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 revealed that Payeer also violated AML/CFT laws by failing to notify the FCIS of crypto transactions of €15,000 or more and having 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. The company was liquidated in 2015, after which Payeer operators were registered in various countries, including Scotland and Poland. In January 2023, following the revocation of its license in Estonia, the company re-registered in Lithuania.

The penalties imposed on Payeer underscore the seriousness with which Lithuanian authorities approach compliance with international sanctions.

In other news related to combatting sanction evasion, in April, Tether announced its plans to freeze any wallets that use its currency, USDT, to bypass US sanctions on Venezuelan oil exports.

Aaron S. , Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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