Paytah Payments Under Scrutiny: Ombudsman Hearings, Scam Allegations, and Regulatory Inaction in Malta

Regulatory Pressure Mounts on Phoenix Payments Ltd a/k/a Paytah

Phoenix Payments Ltd, operating under the trade name Paytah, is a Maltese-based financial institution licensed by the Malta Financial Services Authority (MFSA). The firm is currently facing multiple criminal and regulatory investigations across Europe. Numerous victims have alleged that they were defrauded through scams facilitated via Paytah’s payment network, often involving associated companies and crypto platforms.

Legal Representation and Questionable Compliance Practices

At a Financial Ombudsman hearing in Malta, Franklin Cachia of CSB Group appeared on behalf of Paytah. He is currently serving as the company’s compliance officer. These proceedings also saw the European Fund Recovery Initiative (EFRI) acting on behalf of the scam victims. Former compliance officer Daniela Pesci reportedly resigned after exposing Paytah’s alleged involvement in large-scale money laundering with Estonian crypto processors—claims that were reportedly filed with Maltese authorities and Interpol.

Key Allegations:

• Facilitating scams through accounts opened by illicit crypto payment providers.

• Allowing high-volume transactions from scam operators without proper KYC/AML checks.

• Ignored internal compliance reports and warnings.

Ongoing Investigations and FIAU’s Inactivity

Documents presented in court revealed that Malta’s Financial Intelligence Analysis Unit (FIAU) was given substantial evidence regarding Paytah’s activities. Yet, no formal action (fines or warnings) has been issued to date. FIAU’s leadership—Kenneth Farrugia and Alfred Zammit—has previously faced media backlash for alleged regulatory shortcomings.

Estonian Crypto Processors: Scam-Facilitating Clients of Paytah

Paytah allegedly collaborates with unauthorized Estonian payment processors and crypto firms that are known enablers of financial scams. These firms open accounts with Paytah, allowing victim funds to be funneled directly into fraudulent schemes.

Sample of Scam-Facilitating Entities Using Paytah:

These names surfaced during a Financial Ombudsman hearing led by Reno Borg, revealing the systemic use of Paytah accounts for laundering proceeds of fraud.

Ombudsman Hearings in Malta: A Farce?

Reno Borg, a former Labour Party candidate, was appointed Financial Ombudsman by Edward Scicluna, Malta’s ex-Finance Minister and current Central Bank Governor. In September 2021, a round of hearings was scheduled for victims of scams processed through Paytah.

Key Facts from the Hearings:

• EFRI represented 12 victims, with total losses exceeding €350,000.

• Many had previously attended one or two failed hearings.

• One victim—a 67-year-old Greek man who lost €135,000 via LincolnFX—died shortly before the hearing, reportedly due to financial stress and depression.

• The ombudsman refused jurisdiction over multiple cases, claiming parallel proceedings in the UK took precedence.

• Victims were told to seek criminal complaints, not compensation, through OAFS.

Cachia, representing Paytah, adopted a confrontational tone, dismissing victim testimonies and denying any wrongdoing. Critics noted a disturbing lack of empathy or accountability.

Scam-Or Project Investigations: A Pattern of Facilitation

According to the Scam-Or Project, Phoenix Payments has acted as a key payment intermediary in numerous fraudulent broker schemes, including:

• 10CryptoMarket and Prime-InvestFX, with accounts held by ABV Marketing Consulting Ltd and Business Credit s.r.o

• High-profile scams like Finexics, Infinitrade, RoyalsFX, CodeFX, and LincolnFX

The firm also worked with regulated brokers such as ForexTB, PatronFX, Trade360, and 1Market, raising concerns about why licensed entities would associate with a known scam facilitator.

MFSA’s Regulatory Failure: Proximity Means Nothing

Despite Paytah’s headquarters being just 500 meters from the MFSA, no decisive action has been taken. Media reports suggest that the MFSA often reaches secret settlements with certain entities, reinforcing perceptions of selective enforcement.

MFSA Executive Committee Members Accused of Inaction:

• Christopher Buttigieg

• Michelle Mizzi Buontempo

• Ivan Zammit

• Michael Xuereb

• Edwina Licari

Conclusion: Ignorance or Willful Blindness?

Phoenix Payments continues to operate under MFSA oversight while playing a central role in cross-border scam operations, especially involving unregulated crypto firms. Victims are left without justice, and hearings become exercises in futility.

Questions That Remain:

• Why has the MFSA not sanctioned Paytah despite clear evidence?

• Why are regulated brokers allowed to use this payment channel?

• When will Maltese institutions take a stand against systemic financial abuse?