Abu Dhabi’s financial watchdog has imposed over $12 million in penalties on cryptocurrency firm Hayvn and its former CEO, Christopher Flinos, over serious regulatory violations, including anti-money laundering (AML) breaches and operating without proper authorization.
On Monday, April 14, the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) announced that it had cancelled Hayvn’s financial services license and levied fines totalling $8.85 million against the company. In a parallel move, ADGM’s Registration Authority handed down a separate $3.6 million penalty, with $3.3 million directly attributed to Flinos for orchestrating fraudulent schemes.
Hayvn’s ADGM entity faces significant penalties following an investigation that uncovered serious regulatory violations. It was found that client funds were improperly funnelled through AC Holding, an unlicensed entity, resulting in ineffective risk management and inadequate documentation of client relationships, as well as breaches of anti-money laundering (AML) protocols. The investigation revealed that Hayvn Cayman and AC Holding were involved in misleading practices, generating over 200 false documents to deceive stakeholders. As a result, Flinos, associated with these entities, has been permanently banned from financial services in the ADGM and faces $4.05 million in fines, including $750,000 from the FSRA and $3.3 million from the Registration Authority. Additionally, Hayvn Cayman, Hayvn ADGM, and AC Holding received penalties of $3.6 million, $3 million, and $1.5 million, respectively.
Hayvn’s platform, according to its website, offered over-the-counter crypto trading and payment services for both online and in-person transactions. The company once showed interest in acquiring FTX Pay, the payment division of the collapsed crypto exchange FTX, with Flinos highlighting its ties to major firms like Mastercard. However, there is no confirmation the acquisition ever materialized.
Notably, in August 2024, the ADGM opened a public consultation on a proposed regulatory framework to guide the supervision of fiat-referenced tokens (FRTs), a category of stablecoins. It noted that the issuers of these tokens will face operational restrictions and requirements.
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