If Payeer, a bitcoin exchange, breaks EU rules against Russia, Latvia’s Financial Crime Investigation Service (FNTT) could fine the company a huge $10 million.
Payeer let Russian people and companies use its crypto wallet services, which is against EU rules, according to a statement from the FNTT.Russians could use bank payments and rubles to buy cryptocurrency through Payeer for a long time.
The funding came from banks that are approved by the EU. For about eighteen months, people kept breaking the rules over and over again On October 20, 2022, Payeer was registered in Lithuania. On January 17, 2023, they began doing business there.
Payeer’s Registration and Operations
But in Estonia, they had a license that was taken away for crypto trading services. The FNTT thought that the Lithuanian register was an attempt to keep doing things that were against the law around the world.
Payeer will also have to pay a separate $1.15 million fine for breaking Latvian rules against funds laundering (AML) and giving money to terrorists. This is on top of the $10 million fine for breaking the rules. The FNTT said Payeer didn’t do proper name checks on customers on purpose so it could keep making funds, which made its legal situation worse.
Even though this is going on, the EU is cracking down on crypto companies that help people get around sanctions. Since October 2022, EU rules have said that European coin wallets can’t help people in Russia. This is one of many steps that will be part of later sanctions packages that aim to stop Russia from getting money for its war activities.
New studies show that a lot of crypto companies in Estonia and Latvia have broken the law. People say that these businesses commit scams, launder money, and give money to groups like the Wagner PMC.
The EU’s moves against Payeer show that it means business when it comes to tightening crypto rules. This comes after politicians recently tried to make anti-money laundering (AML) rules stronger. Customers will have to go through more checks starting in January, especially for deals over €1,000. This is to stop people from using coins illegally and getting around sanctions.
