Hayvn Group, its ex-CEO fined $12m plus by Abu Dhabi regulator
ADGM regulator finds 'serious regulatory breaches and misconduct'
Dubai: A stiff $8.85 million fine has been imposed on the Hayvn Group, its former CEO and associated entities by the ADGM regulator in Abu Dhabi.
The Financial Services Regulatory Authority (FSRA) at ADGM went in for enforcement action after an investigation into 'serious regulatory breaches and misconduct' related to Hayvn Group. The former CEO being penalised alongside is Christopher Flinos .
Havyn was providing virtual asset linked financial services.
The enforcement action has led to:
The cancellation of Hayvn ADGM’s Financial Services Permission (FSP).
The prohibition of Christopher Flinos indefinitely from performing any function in a financial services business in ADGM.
Financial penalties totaling $8.85 million being imposed across the four parties involved.
"The FSRA will take robust and appropriate enforcement action against individuals and entities that violate our regulatory framework," said Emmanuel Givanakis, CEO of FSRA at ADGM.
"In this case, the actions of the entities and individuals involved were particularly serious, as they conducted unauthorized virtual asset activities through an unregulated entity based in ADGM.
"Christopher Flinos was found to have provided false and misleading information and statements during the investigation.
"Such misconduct will not be tolerated and warrants strong regulatory penalties which send a strong message of deterrence. ”
How the fines are split up
$3.6 million against AC Holding Ltd. registered in the Cayman Islands (Hayvn Cayman), the parent company of a group of entities operating under the name ‘Hayvn’. The entity that provided financial services related to virtual assets.
$3 million against AC Limited (Hayvn), an ADGM-based subsidiary of Hayvn Cayman. It was licensed and regulated by the FSRA to conduct specific financial services activities in virtual assets.
$1.5 million against AC Holding Limited, a special purpose vehicle registered with the Registration Authority of ADGM. It was not licensed by the FSRA to carry out any form of financial services activity in ADGM.
$750,000 against Flinos, the former senior executive officer of Hayvn ADGM, CEO of Hayvn Cayman, sole owner and director of AC Holding.
Another $3.6 million hit
At the same time, The Registration Authority within ADGM did its investigation into the Special Purpose Vehicle (SPV), AC Holding, and its sole shareholder and director Flinos.
Following this, the RA has imposed a further set of penalties totaling $3.61 million.
This includes $3/3 million on Flinos for 'providing false information to the RA, engaging in various fraudulent schemes and the falsification of company documents'.
FSRA investigation
The FSRA investigation found that Hayvn ADGM had 'exceeded' the scope of its FSP. This it did by 'allowing client transactions to be routed through accounts held by AC Holding, the unregulated special purpose vehicle registered in ADGM - and without any appropriate protections being in place.
"It failed to establish and maintain adequate systems and controls to manage its operations and risks, as well as to recognise and record all of its client relationships, breaching the FSRA’s Anti-Money Laundering (“AML”) requirements," said a statement.
Hayvn Cayman and AC Holding carried out 'significant unlicensed financial services activity' in virtual assets at ADGM from 'around October 2018 to around May 2024'.
"Hayvn Cayman routed client transactions related to the conversion of virtual assets to fiat currency and vice versa through the accounts held and controlled by AC Holding, the SPV that was not licensed by the FSRA, and therefore prohibited from conducting any form of financial services activity in ADGM," the statement added.
Sign up for the Daily Briefing
Get the latest news and updates straight to your inbox
