Abu Dhabi regulator imposes $8.85m fine on financial services company, bans founder

Abu Dhabi Global Market’s Financial Services Regulatory Authority has imposed a fine of $8.85m on Hayvn Group of Companies, which operated under the name ‘HAYVN’, its former CEO, Christopher Flinos and related entities.

The FSRA’s investigation found serious breaches and misconduct concerning the operations of three related party companies and Christopher Flinos. As part of its investigation, the FSRA said in a statement today (14 April)  it had taken steps to ensure that no ADGM client assets or money were lost as a result of the relevant misconduct.

The enforcement action has resulted in the cancellation of Hayvn ADGM’s Financial Services Permission, the prohibition of Christopher Flinos indefinitely from performing any function in a financial services business in ADGM, as well as financial penalties totalling $8.85m being imposed across the four parties involved.

Details of the total fines imposed are as follows:

• $3.6m against AC Holding Limited registered in the Cayman Islands (“Hayvn Cayman”), the parent company of a group of entities operating under the name ‘HAYVN’ that provided financial services related to Virtual Assets.
• $3m against AC Limited (Hayvn) (“Hayvn ADGM”), an ADGM-based subsidiary of Hayvn Cayman, licensed and regulated by the FSRA to conduct specific financial services activities in relation to Virtual Assets.
• $1.5m against AC Holding Limited (“AC Holding”), a Special Purpose Vehicle (“SPV”) registered with the Registration Authority (“RA”) of ADGM and not licensed by the FSRA to carry out any form of financial services activity in ADGM; unconnected to Hayvn Cayman and Hayvn ADGM.
• $750,000 against Christopher Flinos, the former senior executive officer of Hayvn ADGM, chief executive officer of Hayvn Cayman, sole owner and director of AC Holding.

The regulator cited serious breaches and misconduct identified during the FSRA investigation including the following:

• Hayvn ADGM exceeded the scope of its FSP by allowing client transactions to be routed through accounts held by AC Holding, the unregulated SPV entity registered in ADGM, 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.
• Hayvn Cayman and AC Holding carried out significant unlicensed financial services activity in relation to Virtual Assets in 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. As a result, both Hayvn Cayman and AC Holding were found to have carried out unlicensed payments and arranging services in relation to Virtual Asset activities in ADGM.
• Christopher Flinos played a central role in directing and controlling the unlicensed activity in ADGM and as SEO of Hayvn ADGM and CEO of Hayvn Cayman and as the sole director of AC Holding was found to have been centrally involved in the breaches and misconduct. Christopher Flinos lacked integrity and failed to take reasonable care to ensure that Hayvn ADGM operated in compliance with the applicable rules and regulations of ADGM, for which he was ultimately responsible as SEO.
• Hayvn Cayman, AC Holding and Christopher Flinos created and disseminated false and misleading information about the nature of the transactions related to Virtual Assets routed through AC Holding’s accounts.
• This included the provision of over 200 false and misleading documents on AC Holding letterheads to AC Holding’s banking partners to open and then maintain the operation of these accounts. These documents were produced under the direction of Christopher Flinos with the involvement of both Hayvn Cayman and AC Holding.
• Hayvn ADGM, Hayvn Cayman and Christopher Flinos provided false and misleading information to the FSRA in response to requests for information including the nature and scope of the business operations associated with each entity above and specifically AC Holding undermining the integrity of the regulatory process.

In addition to the FSRA fines, the Registration Authority (RA) of ADGM also imposed fines on AC Holding Limited (SPV) and Christopher Flinos. The total fines go up to $12m.

The RA also found that Christopher Flinos engaged in fraudulent trading, where AC Holding facilitated (unlicensed) cryptocurrency conversion transactions and a number of parties were misled about the transactions. Christopher Flinos also facilitated the falsification and provision of hundreds of company documents to fraudulently maintain bank accounts.
As a result, the RA has imposed the following financial penalties totalling USD 3,615,000:
- USD 15,000 against AC Holding for exceeding the scope of its license in contravention of ADGM Commercial Licensing Regulations 2015;
- USD 300,000 against AC Holding for filing false annual accounts about its balances with the RA and various fraudulent schemes in contravention of the ADGM Companies Regulations 2020; and
- USD 3.3 million against Christopher Flinos for providing false information to the RA, engaging in various fraudulent schemes and the falsification of company documents in contravention of the ADGM Companies Regulations 2020.
The RA also disqualified Christopher Flinos from being the director of any ADGM-based company for the maximum allowed period of 15 years. The RA considers Christopher Flinos unfit to serve as a company director in ADGM due to his intentional misuse of AC Holding’s passive SPV commercial licence as a payment facilitator, as well as the fraudulent actions taken to facilitate such misuse.

Emmanuel Givanakis, CEO of the FSRA of ADGM, said, “The FSRA will take robust and appropriate enforcement action against individuals and entities that violate our regulatory framework. In this case, the actions of the entities and individuals involved were particularly serious, as they conducted unauthorised Virtual Asset activities through an unregulated entity based in ADGM.

"Furthermore, 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. ”

Givanakis added, “To address this serious misconduct, the licence of Hayvn ADGM has been cancelled, significant fines have been imposed on the entities involved, and Christopher Flinos has been prohibited from holding any functions in relation to financial services in ADGM. The FSRA remains ever-vigilant and committed to holding entities and individuals accountable for their actions and ensuring the integrity of the financial system in ADGM.”