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REVOLUT Money Laundering investigation & CEO is denying!

REVOLUT Money Laundering investigation & CEO is denying!

The Revolut money laundering investigation has been on the spotlight after the founder and CEO of the London-based banking startup, Nik Storonsky denied allegations of negligence relating to the company’s anti-money laundering (AML) software.

March 6, 2019 | AtoZ Markets - A British newspaper, the Daily Telegraph has published a report on February 28 alleging that it had seen documents proving that the executives of the digital bank Revolut had deliberately switched off an automated system designed to prevent suspicious transactions for a three-month period in 2018.

Without putting up a replacement, the newspaper said thousands of illegal transactions may have been processed through the Revolut's digital banking system between July and September last year. This reportedly has attracted the attention of the UK’s Financial Conduct Authority (FCA) and led to the resignation of Peter Higgins, the CFO of Revolut who had worked at JPMorgan for more than 12 years.

Revolut CEO denies money laundering claims

In an attempt to set the record straight, CEO Nik Storonsky has stated that there's been some misleading information in the media relating to [the startup’s]compliance function. According to him, Revolut had opted to revert to its previous AML systems after an upgrade failed to produce adequate security.

REVOLUT money laundering investigation

He continued by saying this action did not result in a breach of sanctions or AML regulations, meaning the company did not see fit to send a formal notification to the regulator. Storonsky added:

“At no point during this time did we fail to meet our legal or regulatory requirements. We conducted a thorough review of all transactions that were processed during this time, which confirmed that there were no breaches.”

REVOLUT money laundering investigation

At the moment, the fintech firm is the subject of investigation in the United Kingdom and Lithuania. Police in the UK have launched an official fraud investigation over a complaint on a money transfer by the digital bank, adding further pressure to the fintech company that is already facing investigations on other issues from the financial regulators.

 Revolut money laundering investigation

The City of London Police confirmed this as the tweet above shows, that an investigation by the National Fraud Intelligence Bureau was instigated after the Metropolitan Police received a complaint about the company in early February.

In Lithuania, where the digital banking startup received a European banking licence last year, the firm has also come under the microscope over concerns relating to politicians funding. While an initial investigation upon application for a licence is common practice, Revolut was subjected to a second probing, as lawmakers were worried about the source of some stakeholders’ money.

Revolut's internal culture under fire

Meanwhile, the company’s internal culture has also come under attack as a report has emerged that further taints the startup. According to Wired, the successful company, Valued at $1.7 billion has come at a huge cost to its staff. 

Former employees have described a toxic environment of unpaid work, high staff turnover and no work-life balance. It also claims that the staff is compelled to carry out unpaid tasks and given unachievable targets. 

In a message shared on the company’s Slack channel in 2018, the CEO was surprised that senior staff were not working on weekends to hit targets and affirmed those team members with performance ratings “significantly below expectations” would be dismissed without negotiations in a subsequent review.

In a recent Tweet, Storonsky said that the company’s “internal working culture has been evolving as fast as our business”, adding that it had spent a lot of time working on its culture over the past 18 months.

REVOLUT money laundering investigation

Valued at $1.7 billion, Revolut has been quite successful as it claims to have four million customers who have made over 250 million transactions worth £25 billion. The digital bank also provides supports for five cryptocurrencies (Bitcoin, Ethereum, Ripple, Litecoin, and Bitcoin Cash) with plans to include more in the near future.

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ, nor should they be attributed to AtoZMarkets.

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