It might have taken nearly seven years for Abu Dhabi regulators to catch on, but they’ve finally dropped the hammer on crypto firm Hayvn Group. The penalty? A hefty $12.45 million fine for failing to put proper anti-money laundering controls in place.

Turns out, Hayvn and its former CEO, Christopher Flinos, had been channeling client transactions through AC Holding—an unlicensed entity known as a ‘special purpose vehicle’—since way back in October 2018. Regulators point out that this essentially meant they were flying blind, operating without proper anti-money laundering safeguards.

Emmanuel Givanakis, CEO of the FSRA, didn’t mince words, describing these actions as “particularly serious.” He commented on Monday, following the completion of his team’s investigation.

And the plot thickens: Investigators also claim to have unearthed over 200 fake documents bearing AC Holding letterheads that were presented to banking partners. Adding insult to injury, Flinos is accused of repeatedly giving regulators the runaround with false info during questioning.

And let’s be clear – the regulator was not playing games.

The Financial Services Regulatory Authority (FSRA) then slapped a total of $8.85 million in penalties across several related companies. Not to be outdone, the Registration Authority piled on an additional $3.61 million fine, specifically targeting Flinos.

Breaking down the penalties further, it was a carefully calculated distribution: $3.6 million for Hayvn Cayman (registered in the Cayman Islands), $3 million for Hayvn ADGM (the regulated subsidiary), $1.5 million for AC Holding Limited (the unlicensed special purpose vehicle), and $750,000 directly against Flinos himself.

That extra $3.61 million fine from the Registration Authority? Well, $3.3 million of it was pinned directly on Flinos for a laundry list of offenses: “providing false information, engaging in various fraudulent schemes, and falsification of company documents.” The remaining $315,000 was for AC Holding, for stepping outside the bounds of its license.

And the regulators weren’t just about the money. They also pulled the plug on Hayvn’s operating license and issued a permanent ban on Flinos, preventing him from holding any director positions in Abu Dhabi’s financial services industry.

FSRA assures everyone that no client funds vanished during this entire six-year period of regulatory oversight lapse. As of now, neither the regulator nor Hayvn have offered immediate comments to Decrypt’s request.

This tough stance by regulators marks this case as a major enforcement action within the Abu Dhabi Global Market, or ADGM. For context, ADGM functions as the international financial hub and regulatory body in the UAE capital, set up as a free zone with its own distinct civil and commercial laws.

Interestingly, the FSRA specifically mentioned their collaboration with the Cayman Islands Monetary Authority during the investigation. This highlights the increasing trend of regulatory bodies working together across international lines.

Hamad Sayah Al Mazrouei, CEO of the Registration Authority, echoed the sentiment of ‘no messing around’ when he spoke about the fines.

His message was clear: “Where non-compliance is identified, the Registration Authority will take effective, proportionate and dissuasive disciplinary action.”

Edited by Stacy Elliott.