Lithuania Imposes $10M Fine on Crypto Company for Sanctions Violation

UTC by Chimamanda U. Martha · 3 min read
Lithuania Imposes $10M Fine on Crypto Company for Sanctions Violation
Photo: Depositphotos

Lithuania currently hosts approximately 580 crypto firms providing various blockchain-related services within its borders.

The Lithuanian government has levied a fine of €9.3 million, equivalent to approximately $10.1 million, on a crypto company named Payeer for breaching sanctions and anti-money laundering regulations in the country.

According to a recent statement from Lithuania’s financial crimes authority, the Financial Crime Investigation Service (FNTT), Payeer continued to offer services to its Russian clientele despite Russia being on Lithuania’s sanctions list. The firm facilitated transactions for Russian banks, thus circumventing sanctions.

Payeer’s Operations and Violations

FNTT disclosed that a significant portion of Payeer’s customer base, totaling 213,000 users, is located in Russia. Despite efforts to conceal customer identities, authorities discovered that the company enabled transactions in Russian rubles for clients outside Lithuania.

Furthermore, the financial authorities revealed that the company provided both individuals and corporate entities registered in Russia with crypto wallet, account management, and storage services.

Consequently, the authorities have fined Payeer €8.24 million for breaching international sanctions and an additional €1.06 million for violating anti-money laundering laws. However, Payeer retains the right to contest the fine in court.

The company headquartered in Lithuania Commenced operations as a crypto service provider in 2023, following the Estonian government’s revocation of a similarly named company’s operational license due to fraudulent activities.

Lithuania to Introduce New Licencing Regime

Lithuania has been actively combating malicious actors and non-compliant firms to foster a clean and regulated environment for those interacting with its financial economy.

Known for its firm stance against Russia within the European Union and NATO, Lithuania currently hosts approximately 580 crypto firms providing various blockchain-related services within its borders.

In a bid to curb fraud and prevent misuse of digital assets, Lithuania has introduced a new licensing regime mandating registration of all crypto companies under national market watchdogs.

The issuance of licenses is scheduled to commence next year, with expectations that only a fraction of current firms will meet the stringent criteria.

Implementation of New Regulations

Simonas Krepsta, a member of Lithuania’s central bank said last week that Lithuania will revoke licenses of companies failing to meet regulatory standards, with the new licensing regime set to be fully implemented by June 2025.

In addition to the new regime, Lithuania is preparing to introduce local regulations to oversee the usage and issuance of cryptocurrencies within the country. The law will also determine how companies will service their users.

These laws will empower the Financial Intelligence Unit to enforce anti-money laundering regulations and take action to revoke or terminate corporate registrations.

Cryptocurrency News, News
Related Articles