The Reserve Bank of Vanuatu has revoked the international banking license of Pacific Private Bank (PPB), following revelations that the institution had been used to channel tens of millions of euros raised from investors in a cryptocurrency venture into private accounts and luxury properties. The decision marks a rare but significant regulatory response to a cross-border financial scandal involving cryptocurrency, offshore banking, and alleged self-dealing by the founders of Lithuanian fintech firm Bankera.

The move came after an April investigation by the Organized Crime and Corruption Reporting Project (OCCRP) and Lithuanian news outlet 15min exposed how Bankera’s founders – Lithuanian businessmen Mantas Mockevičius, Vytautas Karalevičius, and Justas Dobiliauskas – used PPB to transfer more than 45 million euros raised during their 2017–2018 initial coin offering (ICO) out of Lithuania. These funds, investigators found, were subsequently diverted into shell loans, luxury real estate purchases, and even personal accounts belonging to the same trio.

The revelations have cast a long shadow over both Vanuatu’s offshore banking industry and Lithuania’s fintech sector, which had previously touted Bankera as a success story of European cryptocurrency innovation.

According to leaked bank statements and company records obtained by OCCRP and 15min, the three Bankera founders used their control over PPB to underwrite a network of loans to companies they also owned. These firms then used the proceeds to acquire properties worth millions of euros, including a €1.1 million villa on the French Riviera, as well as multiple real estate holdings in Lithuania.

Even more troubling, millions of euros were reportedly loaned directly to the founders themselves – with transfers often marked as being for “personal use.” The paper trail suggested a sophisticated effort to move investor capital out of Bankera’s ICO ecosystem into private ventures, circumventing both Lithuanian financial regulations and international anti-money laundering (AML) standards.

The BNK token, the cryptocurrency launched during the ICO, was marketed as a major digital banking innovation. Bankera promised that token holders would receive a share of the company’s weekly revenues, projecting an ambitious vision of blockchain-based financial services for millions of customers. By 2018, Bankera claimed it had raised over €100 million from investors across Europe and Asia.

However, those lofty promises quickly unraveled. By 2022, investors had stopped receiving their promised payouts, and the BNK token’s value had collapsed to a fraction of its peak. For many who had invested in the ICO, the dream of decentralized banking had become a cautionary tale of unchecked greed and regulatory loopholes.

In response to the OCCRP investigation, the Reserve Bank of Vanuatu (RBV) initiated its own review of Pacific Private Bank’s activities. In a letter dated November 4, the central bank formally revoked PPB’s international banking license, citing multiple violations of the International Banks Act and the bank’s failure to demonstrate “good reason” why its license should not be withdrawn.

“The Reserve Bank has decided to take enforcement measures,” the letter stated, instructing PPB to cease all international banking activities immediately and return its license to regulators.

The decision followed a September warning letter in which the RBV had accused the bank of breaching license conditions and demanded explanations. According to OCCRP’s reporting, PPB failed to provide a satisfactory response.

Although the RBV did not publicly detail the specific violations, the timing of its decision – coming just months after the OCCRP exposé – suggests that the investigative findings played a decisive role.

Pacific Private Bank’s leadership has consistently denied any wrongdoing. Earlier this year, Eimantas Kazlauskas, PPB’s Managing Director, told reporters that the bank “complies with all Vanuatu banking laws and regulations.” Similarly, PPB’s Resident Director, Martin St. Hilaire, insisted in March that the institution “has always been compliant and a good example of a small independent private bank.”

When confronted with the findings of the OCCRP and 15min investigation, lawyers representing PPB declined to comment on the specific transactions, citing Vanuatu’s banking secrecy laws, which limit the public disclosure of client and transaction information.

Nevertheless, the regulators’ decision to revoke PPB’s license indicates that Vanuatu authorities no longer accept the bank’s assurances. The case also places renewed scrutiny on the Pacific island nation’s financial sector, which has long marketed itself as a hub for offshore banking and investment but has faced recurring criticism over transparency and oversight.

The repercussions have extended far beyond the Pacific. Following the OCCRP investigation, Lithuania’s Financial Crime Investigation Service (FNTT) launched a pre-trial investigation in May into the actions of Bankera’s founders.

In a public statement, the FNTT announced that it would “seek to establish all significant factual circumstances and assess whether a criminal act was committed by the company.” The probe will examine whether Bankera’s ICO funds were illegally transferred or misused and whether any breaches of Lithuania’s anti-money laundering or financial fraud laws occurred.

So far, the three co-founders – Mockevičius, Karalevičius, and Dobiliauskas – have not responded to OCCRP’s or 15min’s requests for comment. Bankera, for its part, continues to operate online, claiming to serve over one million users.

For Vanuatu, the case is particularly damaging. The country’s offshore banking sector has often been criticized as a conduit for tax evasion and financial misconduct. Over the past decade, several banks licensed in the island nation have been flagged by international regulators for inadequate compliance with anti-money laundering standards.

By revoking PPB’s license, the Reserve Bank of Vanuatu appears to be signaling a tougher stance against financial malpractice – possibly in response to mounting global pressure to clean up offshore jurisdictions. Yet, critics argue that such actions often come only after media exposés or external investigations, raising questions about the effectiveness of Vanuatu’s regulatory oversight.

The Bankera case underscores how the early euphoria surrounding cryptocurrency and ICOs has often masked serious governance and accountability issues. The ICO boom of 2017–2018 saw billions of dollars raised worldwide, frequently with little to no regulatory supervision. While some blockchain ventures used the funds to build legitimate businesses, others exploited the lack of oversight to enrich insiders.

In this instance, investors were left holding tokens that have since become nearly worthless. What began as a vision for a “decentralized digital bank” ended with luxury properties, offshore loans, and a revoked banking license.

The collapse of Pacific Private Bank’s international license serves as a stark reminder of the risks embedded in the intersection of cryptocurrency and offshore finance. For investors, it highlights how easily enthusiasm for innovation can be manipulated by those seeking personal gain. For regulators, it underscores the necessity of international cooperation in tracking financial flows that transcend borders and jurisdictions.

As Vanuatu’s central bank attempts to restore confidence and Lithuania’s authorities dig deeper into Bankera’s dealings, the scandal stands as a broader warning: when transparency is traded for secrecy, even the most promising financial technologies can become vehicles for fraud.

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