The Central Bank of Russia Cancels Bank Hephaestus License Amid AML and Compliance Violations
The Central Bank of Russia has revoked the trading license of Bank Hephaestus. The regulator published official instructions detailing the license cancellation and the regulatory basis for this action. The decision highlights the credit institution’s breaches of federal banking laws and Central Bank regulations governing banking activities, along with repeated violations within a year of the requirements set forth by the law on Combating Legalization (Laundering) of Proceeds of Crime and Financing of Terrorism, as well as the broader Central Bank rules. These findings underscore a sustained failure to meet the strict standards designed to prevent illicit financial activity and protect the integrity of the financial system. Source: Central Bank regulator.
On February 21 the regulator recalled that Bank Hephaestus had previously obtained its license from QIWI Bank and subsequently began blocking transactions through their wallets. The regulator noted a pattern of activity that raised serious red flags, including frequent involvement in shadow trading and fund transfers directed toward crypto exchanges, illegal online casinos, and bookmakers. This behavior suggested attempts to obscure the true origin and destination of funds, undermining consumer protection and market integrity. Source: Central Bank regulator.
Additionally, the regulator indicated that the central bank had extended its authority to non-bank entities for disclosing sanctions-sensitive information, signaling a broader tightening of transparency and compliance expectations across the financial ecosystem. This move aligns with ongoing efforts to enhance oversight, reduce circumvention of sanctions, and promote more reliable data sharing among financial actors and supervisory authorities. Source: Central Bank regulator.