Authorities sent an important message by fining local cryptocurrency company Payeer a total of 9.3 million Euros (approximately $10.07 million) for sanctions violations and anti-money laundering (AML) violations. This sanction is an important warning not only for Payeer but also for all companies operating in the cryptocurrency industry.

According to the research conducted by FNTT, Payeer carried out activities that facilitated the violation of sanctions imposed on Russia. The company’s ability to facilitate money transfers between Russian banks becomes a sensitive issue, especially in the context of the Ukrainian war. This harsh sanction by Lithuania demonstrates its determination to effectively enforce sanctions and deter sanctions violations.

The total fine of €9.3 million covers two separate violations:

Sanctions Violation: This fine of 8.2 million Euros arises from Payeer’s actions aimed at circumventing Russian sanctions.

AML Violation: This fine of 1.1 million Euros stems from Payeer’s failure to accurately report suspicious financial transactions and its violation of anti-money laundering procedures by hiding the identities of its customers.

FNTT’s report reveals that more than 213,000 Russian Payeer customers were able to easily bypass sanctions and transfer money for more than a year. This situation highlights the seriousness of Payeer’s failure to implement AML/KYC (know your customer) procedures stringently enough.

This move by Lithuania can be considered an important step in the fight against the increasing risks of money laundering and sanction evasion in the cryptocurrency sector on a global scale. In March 2024, the US Treasury Department’s Office of Foreign Assets Control (OFAC) similarly blacklisted several blockchain companies and cryptocurrency exchanges that helped evade sanctions in Russia.

It is also noteworthy that Payeer started operating in Lithuania immediately after the license in Estonia of another company operating under the same name was revoked. This shows that regulatory authorities follow cryptocurrency companies closely and take a strict stance in imposing sanctions.

The penalty imposed by Lithuania on Payeer is an important warning for companies operating in the cryptocurrency industry. This situation once again emphasizes that companies must strictly follow sanctions compliance and AML/KYC procedures. At the same time, it is possible to predict that the institutions responsible for enforcing sanctions and preventing money laundering will increase their inspections.

The maturation and trustworthiness of the cryptocurrency industry depends on an ecosystem based on transparency and responsibility. Lithuania’s tough stance towards sanctions violations is an example of positive developments in this field. This sanction may set a precedent for cryptocurrency companies to fulfill their responsibilities and comply with sanctions.