The Lithuanian Financial Crime Investigation Service (FNTT) has levied a monumental fine of 9.29 million euros (approximately $10 million) on the cryptocurrency payment service, Payeer. The penalty, announced on July 7, is the largest ever imposed on a virtual asset service provider in Lithuania, stemming from alleged breaches of Anti-Money Laundering (AML) regulations.

Breach of AML Regulations and Sanctioned Bank Transfers

FNTT’s investigation revealed that Payeer enabled customers to conduct transactions involving sanctioned banks, thereby violating stringent AML protocols. This enforcement action underscores the severity of Payeer’s transgressions in facilitating illicit financial activities.

Overview of Payeer’s Services

Payeer operates as a multifaceted crypto exchange and e-commerce payment platform. It facilitates currency exchanges among euros, United States dollars, and Russian rubles, in addition to various cryptocurrencies. The service also supports withdrawals via debit cards and offers an API for merchants to integrate cryptocurrency payments.

Read more: FCA Cracks Down on $1.3 Billion Illegal Crypto Operation

Investigation Details and Regulatory Infractions

According to a translated statement from FNTT, the investigation into Payeer commenced in 2023. Initially registered and licensed in Estonia, Payeer had its license revoked on January 17. Subsequently, the company continued operations from its Lithuanian headquarters.

The FNTT’s findings highlighted Payeer’s inadequate customer identification processes. The service permitted transactions in Russian rubles and facilitated transfers through sanctioned Russian banks, primarily involving clients from Russia.

FNTT’s Statement on the Violations

The agency’s report detailed the extent of the infractions: “‘Payeer.com,’ through which the company serves its clients, predominantly from Russia, allowed transactions involving Russian rubles, directing funds to and from banks sanctioned by the European Union.”

Long-Term Non-Compliance and Revenue Insights

The infractions spanned over a period exceeding 1.5 years. During this timeframe, Payeer amassed at least 213,000 customers, generating revenue exceeding 164 million euros.