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Latvian Officials Impose $10 Million Penalty on Crypto Provider Payeer for Breaching Sanctions Against Russia
Latvia’s financial crimes authority has imposed a “record” fine of $10 million on the cryptocurrency payment service provider Payeer for breaching EU sanctions against Russia.
According to an official announcement from the Lithuanian Financial Crime Investigation Service (FNTT), Payeer has “not adhered to international sanctions.”
The agency stated that Payeer provided individuals and businesses in Russia with access to its cryptocurrency wallet services.
Latvia Financial Crimes Authority: Payeer Did Not Comply with Sanctions Regulations
The agency further noted that Payeer permitted Russian clients to purchase cryptocurrency via bank transfers. It indicated that customers were allowed to transact in Russian rubles, moving funds “from banks under EU sanctions” over a span of a year and a half.
The FNTT clarified that Payeer was registered as a business in Lithuania on October 20, 2022. However, the agency stated that it “actually commenced operations on January 17, 2023.”
An earlier version of the company was reportedly registered in Estonia. However, the FNTT mentioned that this entity “had its license to conduct [crypto exchange] activities revoked.” The agency noted:
“In Lithuania, the company was possibly established to continue Payeer’s operations, which are inconsistent with international sanctions.”
The agency asserted that the company had “declined to cooperate” with its investigation into its activities.
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It also accused Payeer of breaching Latvian anti-money laundering and counter-terrorism financing regulations.
As a result, the FNTT stated, the agency imposed an additional fine of $1.15 million on Payeer.
Group of Seven sanctions aimed at depriving the Kremlin of petrodollars are failing in one of their key objectives: driving up the cost of delivering Russian oil. https://t.co/T9teFIljCk
— Bloomberg Markets (@markets) July 8, 2024
EU’s Crypto Sanctions Target Russian Cryptocurrency Users
In October 2022, the European Union prohibited cryptocurrency wallets operated from Europe from offering services to Russian clients.
The EU incorporated these measures in its eighth package of sanctions, prompting many European cryptocurrency providers to block Russian bank accounts.
Since then, the union has implemented additional crypto-related sanctions. Its most recent set of sanctions, announced in June this year, constituted its 14th package.
The FNTT indicated that Payeer had not conducted sufficient identity verification on its customers. It stated that the company had done so “deliberately, in order not to forfeit a significant portion of its revenue.” The agency concluded that Payeer has the legal right to contest its decisions.
Last month, a survey in Russia revealed that a growing number of citizens are turning to stablecoins like USDT in an effort to circumvent sanctions.
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