Record Fine by FCIS
Payeer, a cryptocurrency operator, has been fined nearly €9.3 million by the Lithuanian Financial Crime Investigation Service (FCIS) for violations of international sanctions and anti-money laundering (AML) regulations. This fine comprises €8.236 million for sanctions breaches and €1.06 million for AML/CFT law violations. The FCIS found that Payeer facilitated transactions in Russian roubles with sanctioned Russian banks and provided services to Russian entities, neglecting the required customer identification and transaction monitoring protocols.
Frequent Changes in Legal Entities and Jurisdictions
Payeer has frequently changed its operating legal entities and jurisdictions in recent years. The latest user agreement requires users to accept Payeer E.A.S. in Paraguay as the legal entity, while also providing a correspondence address in London. Notably, the Lithuanian company Payeer UAB is absent from the user agreement, suggesting that Payeer preemptively moved operations to Paraguay in anticipation of the FCIS penalties.
Unclear Regulatory Status
It remains unclear what regulatory permissions, if any, Payeer has to operate in Europe, North America, and other regions. The company appears to be functioning without a valid license or permit, raising significant concerns about its compliance with local and international regulations.
Ongoing Compliance Issues
Our review on July 11, 2024, revealed that EU residents from various jurisdictions could register with Payeer without any issues. Prior to completing the KYC check, we could have deposited $15,000 through Volet or the Russian Perfect Money. Additionally, unlimited pre-KYC deposits using cryptocurrencies were possible. These findings indicate that Payeer’s KYC procedures remain inadequate, justifying the penalties imposed by the FCIS.
PayRate42 Rating
Due to the significant fine imposed by the FCIS, the ambiguous regulatory status, and the continued violations of AML/CFT regulations, PayRate42 maintains its Red Compliance and Red Risk rating for Payeer. Users are advised to exercise caution and be aware of the potential risks associated with using Payeer’s services.
For more detailed information, refer to the original announcement by the Lithuanian Financial Crime Investigation Service.