Latvia’s financial crimes unit has fined the crypto pay service provider Payeer a “record” $10 million for violating EU sanctions on Russia.
Per an official notice from the Lithuanian Financial Crime Investigation Service (FNTT), Payeer has “failed to comply with international sanctions.”
The unit said that Payeer offered individuals and companies from Russia access to its crypto wallet services.
Latvia Financial Crimes Unit: Payeer Failed to Abide by Sanctions Rules
The unit added that Payeer had let Russian customers buy crypto using bank transfers. It said customers were allowed to pay in Russian rubles, transferring funds “from banks under EU sanctions” over a period of a year and a half.
The FNTT explained that Payeer registered as a company in Lithuania on October 20, 2022. But the unit said it “actually started to carry out operations on January 17, 2023.”
A previous iteration of the company was allegedly registered in Estonia. But this firm, the FNTT said, “had its license to carry out [crypto exchange] activities revoked.” The unit wrote:
“In Lithuania, the company was possibly established to continue Payeer’s operations, which are incompatible with international sanctions.”
The unit claimed that the company had “refused to cooperate” with its probe into its operations.
It additionally accused it of violating Latvian anti-money laundering and combating the financing of terrorism protocols.
For this, the FNTT added, the unit issued Payeer a separate fine worth $1.15 million.
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 Crypto Users
In October 2022, the European Union banned crypto wallets whose operators are based in Europe from providing services to Russians.
The EU included the measures in its eighth package of sanctions. This led many European crypto providers to block Russian bank accounts.
The union has since followed up with more crypto-related sanctions. Its most recent round of sanctions, unveiled in June this year, was its 14th package.
The FNTT explained that Payeer had failed to perform adequate ID checks on customers. It said the company had done so “intentionally, in order not to lose a significant part of its income.” The unit concluded that Payeer was legally entitled to appeal its rulings.
Last month, a Russian survey found that an increasingly large number of citizens are turning to stablecoins like USDT in a bid to evade sanctions.
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