It took Abu Dhabi regulators almost seven years to notice, but they have now levied $12.45 million in fines against crypto firm Hayvn Group for lack of anti-money laundering controls.
The firm and former CEO Christopher Flinos were routing client transactions through AC Holding—an unlicensed special purpose vehicle—since October 2018. That means they were operating with virtually no anti-money laundering controls in place, according to regulators.
Those actions were “particularly serious,” Emmanuel Givanakis, CEO of the FSRA said Monday after his team wrapped their probe.
Investigators say they also uncovered over 200 falsified documents on AC Holding letterheads provided to banking partners, with Flinos repeatedly feeding regulators false information whenever questioned.
And the regulator wasn’t messing around.
It went on to impose $8.85 million in total penalties across several affiliate entities, while the Registration Authority added another $3.61 million on Flinos for good measure.
Penalties were distributed precisely across multiple entities: $3.6 million against Hayvn Cayman, which is registered in the Cayman Islands; $3 million against Hayvn ADGM, the regulated subsidiary; $1.5 million against AC Holding Limited, the unlicensed special purpose vehicle; and $750,000 directly against Flinos.
The Registration Authority’s additional $3.61 million fine included $3.3 million against Flinos for “providing false information, engaging in various fraudulent schemes, and falsification of company documents,” with the remaining $315,000 levied against AC Holding for exceeding its license scope.
The regulators also revoked Hayvn’s operating license and permanently banned Flinos from directorships in Abu Dhabi’s financial services sector.
The FSRA claims no client funds went missing during the six-year regulatory blind spot. Neither the regulator nor Hayvn immediately responded to Decrypt’s request for comments.
This regulatory smackdown marks one of the biggest enforcement cases in the Abu Dhabi Global Market, or ADGM, which operates as the international financial center and regulatory authority established in the UAE capital as a free zone with its own civil and commercial laws.
Notably, the FSRA acknowledged cooperation with the Cayman Islands Monetary Authority during its investigation, signaling how coordination between regulators are growing beyond borders.
Hamad Sayah Al Mazrouei, CEO of the Registration Authority did not mince words when commenting on the fines.
“Where non-compliance is identified, the Registration Authority will take effective, proportionate and dissuasive disciplinary action,” he said.
Edited by Stacy Elliott.
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