Lithuanian regulator fined crypto platform Payeer for violating sanctions and AML norms

The fine amounted to 8.23 million for violating the sanctions, while Payeer was ordered to pay another 1.06 million for violating AML norms. Such a high fine was imposed due to the fact that the company, according to officials, refused to cooperate and did not provide explanations in the investigation.

It is specified that the investigation against Payeer, which qualifies as a virtual asset service provider (VASP), started in 2023.

The company registered in Lithuania back on October 20, 2022, but actually started operations on January 17, 2023, when the branch registered in Estonia was stripped of its VASP license.

It is specified that the platform allowed clients from Russia to make transactions in rubles, transferring funds from the accounts of banks under EU sanctions. Also, clients from Russia had access to the services of creating a cryptocurrency wallet, storage of funds and account management.

It is specified that VASP is obliged to carry out customer identification (KYC) to make sure that the services are not provided to persons from the sanctions lists. While Payeer, according to representatives of the regulator, deliberately avoided introducing KYC procedures in order not to lose a significant part of revenue.

In addition, the company did not notify the FNTT of transactions over €15,000, as required by AML legislation.

Officials found that Payeer violated the sanctions for more than a year and a half. During this period, it served at least 213,000 customers and earned more than 164 million euros. The company reportedly has the option to appeal the FNTT's decision.

In April, Lithuania announced its intention to tighten regulation of cryptocurrency companies and introduce mandatory licensing for them from 2025.

In May, it became known that the U.S. Attorney's Office is investigating violations of AML laws by the company Block of Twitter (NYSE:TWTR) founder Jack Dorsey. In June, Binance announced its intention to pay a $2.3 million fine for multiple violations of AML regulations in India in order to return to the local market.