REVOLUT Money Laundering Investigation, CEO is Denying

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. The Revolut money-laundering investigation has been on the spotlight after that.

The article was updated on 31 December, 2019 by Amicus.

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

The newspaper said thousands of illegal transactions might 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 it 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

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.

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He continued by saying this action did not result in a breach of sanctions or AML regulations. It meant that 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. That adds further pressure to the fintech company. It is already facing investigations on other issues from the financial regulators.

The City of London Police confirmed this on the tweet. An investigation, led by the National Fraud Intelligence Bureau, instigated after the Metropolitan Police received a complaint about the company in early February.

In Lithuania, 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. An initial investigation upon application for a licence is common practice. However, Revolut subjected to a second probing, as lawmakers 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 compelled to carry out unpaid tasks and given unachievable targets.

The CEO said on the company’s Slack channel in 2018 that senior staff were not working on weekends to hit targets. And he also affirmed those team members with performance ratings significantly below expectations. That would dismiss without negotiations in a subsequent review.

In a recent Tweet, Storonsky said that the company’s internal working culture had evolved as fast as our business. He added that it had spent a lot of time working on its culture over the past 18 months.

Valued at $1.7 billion, Revolut has been quite successful as it claims to have four million customers. However, they 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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