The Lithuanian Financial Crime Investigation Service (FNTT) imposed fines of 9.29 million euros (approximately $10 million) on crypto payment company Payeer, according to a July 7 announcement. The government agency claimed that Payeer violated Anti-Money Laundering regulations and allowed customers to transfer money to sanctioned banks.
According to the announcement, the fines were the largest ever imposed on a virtual asset service provider in the country.
Payeer is a crypto exchange and e-commerce payment service. According to its website, it allows users to exchange between euros, United States dollars and Russian rubles, as well as between different cryptocurrencies. It also allows withdrawals via debit cards and provides an API for merchants to accept cryptocurrencies as payment for goods and services.
According to a Google translation of the FNTT’s announcement, the agency began investigating Payeer in 2023. It discovered that the company had originally been registered and licensed in neighboring Estonia, but this license was revoked on Jan. 17. The company then continued operating out of a headquarters registered in Lithuania.
The agency claimed that Payeer failed to adequately identify its customers’ identities. In addition, it allowed transfers to be made in Russian rubles and through sanctioned Russian banks. It stated:
“‘Payeer.com’ through which the company belongs to its customers, mainly from Russia, allowed transactions to be carried out by Russian rubles, transferring them from and to Russian banks sanctioned by the European Union.”
FNTT claimed that these transactions have been occurring “for more than 1.5 years.” During this time, Payeer “was found to have at least 213 thousand customers, and the company’s revenue amounted to more than 164 million euros.”
The agency reported that it tried to contact Payeer and convince it to stop allowing the sanctioned transactions, but it “did not cooperate, did not provide clarification.”
The fines consisted of two parts. The first was an 8.23 million euro ($8.91 million) fine for “violations of international sanctions,” and the second was a 1.06 million euro ($1.15 million) fine for “violations of the Law on the Prevention of Money Laundering and Terrorist Financing (PPTFP).”
FNTT said Payeer has the right to appeal the decision. Cointelegraph contacted Payeer for comment but did not receive a response by the time of publication.
Over the past year, governments have been cracking down on crypto exchanges that allegedly do not comply with Anti-Money Laundering regulations. In November, Binance settled with the United States Justice Department (DOJ) for $4.3 billion after the exchange was accused of not properly identifying customers and allowing some sanctioned transactions to occur. In March, the DOJ also charged KuCoin with failing to prevent money laundering on its exchange. In that particular case, KuCoin responded by claiming that it “strictly adheres to compliance standards.”
