Lithuania Charges Crypto Firm Payeer $10.1M for Regulatory Violations

Payeer violated Lithuanian’s money laundering regulations by interacting with Russian-sanctioned banks, which resulted in a $10.1 million fine. 

Lithuanian Financial Crime Investigation Service (FNTT) has fined Payeer, a cryptocurrency payment company operating in the country,  €9.3 million ($10.1 million). The firm was charged with violating sanctions and facilitating money laundering, especially by interacting with Russian-sanctioned banks

Payeer to Pay $10.1M

According to a press release by the Lithuanian FNTT on Wednesday, Payeer, a company specializing in currency conversion transactions, has not abided by the country’s regulations for dealing with Russian clients. The company processed transactions involving European Union-sanctioned banks in Russia, which goes against the country’s laws. 

Additionally, Payeer has been accused of providing virtual currency wallets and accounts to Russian individuals and businesses. This move not only enabled Russian entities to access the global financial system, escaping economic restrictions imposed on the country by the European Union but also sparked a more comprehensive investigation into the use of cryptocurrency to evade sanctions. 

Payeer registered in Lithuania in 2022 and began processing illegal transactions a few months later. FNTT’s investigation started in 2023. This scrutiny intensified after the company lost its license in Estonia and continued to process prohibited transactions in Lithuania. 

Payeer’s actions have raised concerns about its compliance with anti-money laundering and sanctions regulations and significantly escalated the investigation. The company’s involvement in these transactions has put its operations under intense scrutiny, leading to the Lithuanian government imposing a $8.9 million (€8.2 million) fine.

The FNTT’s thorough investigation revealed that Payeer had been processing prohibited transactions with Russian users for over a year and a half, further highlighting the company’s lack of concern for regulatory compliance. 

Further, the company violated the country’s Prevention of Money Laundering and Terrorist Financing Law (PPTFPĪ). It did not notify the FNTT of transactions that exceeded €15,000 as required by the law. Payeer also did not set up an effective department for client verification and risk management and did not submit needed information to the FNTT. As a result, the company was fined $1.1 million (€1.06 million).

Recent Crypto-Related Sanctions

Since this year, a few companies and agencies have faced sanctions concerning their involvement with cryptocurrencies. The foremost is the sanction imposed on the U.S. SEC for abuse of authority and mismanagement of Utah-based crypto firm DEBT Box.

Further, the U.S. SEC has charged Ripple with sanction violation and asked for a $2 billion fine, and the case is still ongoing.