Crypto

Lithuania Fines Crypto Firm Payeer €9.3M for Sanctions Violations

Lithuania fines Payeer €9.3 million for sanctions and money laundering violations involving Russian clients.

By Jack Wilson

7/10, 08:19 EDT
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Key Takeaway

  • Lithuania fined crypto company Payeer €9.3 million ($10.1 million) for sanctions and money laundering violations involving Russian clients.
  • Payeer allowed transactions in Russian rubles from EU-sanctioned Russian banks and provided services to sanctioned individuals and entities.
  • Lithuania aims to reduce crypto firms through new licensing plans to prevent money laundering and investor fraud.

Record Fine for Payeer

Lithuania has imposed a record fine of €9.3 million ($10.1 million) on the crypto company Payeer for violations related to sanctions and money laundering involving Russian clients. The Financial Crimes Investigation Service (FCIS) announced that Payeer allowed Russian customers to conduct transactions in Russian rubles by transferring funds from banks sanctioned by the European Union. Additionally, Russian individuals and legal entities were provided with cryptocurrency wallet services, account management, and storage services, which contravenes EU sanctions.

Violations and Penalties

The fine is divided into two parts: €8.24 million for violations of international sanctions and €1.06 million for breaches of anti-money laundering laws. The FCIS emphasized that Payeer's actions facilitated the movement of funds from EU-sanctioned Russian banks, thereby undermining the integrity of the financial system. The company has the option to appeal the fine, but as of now, no comment has been made by Payeer.

Lithuania's Regulatory Crackdown

Lithuania, a member of the EU and the eurozone, has become a significant hub for financial technology startups over the past decade. However, the country is now tightening its regulatory framework to curb the misuse of digital assets for money laundering and fraud. The new licensing plan aims to reduce the number of crypto firms operating within its borders, ensuring that only compliant and transparent businesses can continue their operations. This move is part of a broader effort to enhance financial security and protect investors.