FSRA Takes Action Against Hayvn in Cryptocurrency Sector
The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market has taken significant steps to address violations in the cryptocurrency sector. In a recent announcement, the FSRA revealed that it has imposed a whopping $12 million in fines against the crypto company Hayvn, along with its former CEO Christopher Flinos, due to serious lapses in anti-money laundering (AML) protocols and unauthorized operational activities.
Details of the Penalties
On April 14, the FSRA disclosed that it levied a total of $8.85 million in penalties against Hayvn Group and proceeded to revoke its financial services license. Furthermore, the ADGM’s Registration Authority issued an additional fine of $3.6 million, predominantly targeting Flinos, who was fined $3.3 million for his involvement in various fraudulent schemes.
Additional penalties encompassed separate fines amounting to $3.6 million directed at Hayvn Cayman, $3 million against Hayvn ADGM, and $1.5 million against AC Holding. Flinos himself received a personal fine of $750,000, and he has been barred from holding any financial services position within the ADGM following the investigation.
Investigation Findings
According to the findings of the FSRA, Hayvn ADGM facilitated client transactions through the accounts of AC Holding—an entity that did not possess the necessary licensing. The agency underscored that Hayvn failed to implement sufficient systems and controls to manage its operations, as well as inadequately recorded its client relationships, which constitutes a breach of AML requirements.
Moreover, the investigation indicated that both Hayvn Cayman and AC Holding managed client transactions facilitating the conversion of virtual assets to fiat currency and vice versa, through unlicensed accounts. The inquiry found that this operation was marred by the distribution of misleading information, including the generation of over 200 fraudulent documents.
Business Operations and Future Plans
Hayvn’s platform offered users the means to trade cryptocurrencies via over-the-counter services and enabled online as well as in-person crypto payments. Notably, in November 2022, the firm’s board expressed interest in acquiring FTX’s payments unit, known as FTX Pay, claiming it was a valuable asset due to its associations with major corporations like Mastercard. However, details surrounding the completion of this acquisition remain uncertain.
