Abu Dhabi Regulator Slaps HAYVN with $12.47M Fine for Crypto Breaches

In a major move from Abu Dhabi's financial watchdogs, Abu Dhabi Global Market (ADGM) has slapped hefty fines on AC Holding Limited and its CEO, Christopher Flinos, following significant breaches involving unauthorised crypto-related activities. The total penalties run up to a startling US$12.47 million.

Investigations carried out by the Registration Authority (RA) and the Financial Services Regulatory Authority (FSRA) revealed that the company, trading under the name HAYVN, had seriously stepped outside the scope of its Special Purpose Vehicle (SPV) commercial licence. Instead of sticking strictly to authorised business, it was unlawfully operating as an investment service, converting cryptocurrency into fiat money and vice versa—all without proper regulatory approval.

Adding salt to the wound, the authorities discovered that between 2019 and 2022, AC Holding had submitted false annual financial reports, attempting to conceal the scale of their off-the-books activities. CEO Christopher Flinos didn't escape lightly either—investigators found evidence of fraudulent trades under his watch and accusations of forging hundreds of company documents to maintain unauthorised bank accounts.

The RA didn't mess around, fining the company US$3.61 million and disqualifying Flinos himself from holding any directorship within ADGM for the next fifteen years. Hamad Sayah Al Mazrouei, CEO of ADGM Registration Authority, said the penalties reflect their commitment to maintaining business integrity within the ADGM and safeguarding public trust. "Where non-compliance is identified," he added, "the Registration Authority will take effective, proportionate and dissuasive disciplinary action.”

Meanwhile, a parallel investigation by the FSRA found an additional slew of deep-rooted compliance issues. Flinos and his group allegedly facilitated large-scale cryptocurrency transactions through AC Holding's unlicensed infrastructure, providing misleading documentation to banking partners, and worse yet, giving inaccurate responses to investigators throughout the probe.

All told, the FSRA imposed fines amounting to US$8.85 million, firmly underlining their intolerance for regulatory abuses. Emmanuel Givanakis, CEO of FSRA, didn't mince his words: "The FSRA will take robust and appropriate enforcement action against individuals and entities that violate our regulatory framework. Such misconduct will not be tolerated and warrants strong regulatory penalties."

For folks familiar with fintech (perhaps regular readers of Arageek), this is a stark reminder: playing fast and loose with crypto regs doesn't go unnoticed—especially not in ADGM, one of the region's strictest regulatory environments. It looks like HAYVN has learned that lesson the hard way.

While crypto enthusiasts might be used to seeing more relaxed oversight elsewhere, ADGM's latest action clearly signals that firms operating in Abu Dhabi must adhere diligently to the rules or face steep concequences.

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