FinTech: Revolut Under Regulatory Glare For Releasing Funds From ‘Suspicious’ Accounts

October 2, 2023 | FinTech, News

The accounts were red-flagged by the UK’s National Crime Agency.

Revolut, the fintech giant, is currently under the scrutiny of the UK’s financial regulator due to alleged failures that allowed money to be withdrawn from accounts that had been flagged by the National Crime Agency (NCA) as suspicious. This issue, which occurred between July and August, has raised concerns as up to £1.7 million was reportedly released from these flagged accounts. Revolut reported the problem to the Financial Conduct Authority (FCA), which oversees its payments business, in recent weeks, but one source claims that only £500,000 was released.

The NCA has the authority to restrict accounts suspected of being involved in money laundering or illicit financial activities to facilitate investigations. This is not the first time that Revolut’s controls against financial crime and money laundering have come under scrutiny. There have been previous concerns related to flaws in its payments system, which allowed US criminals to steal over $20 million. (FT)

These developments come as Revolut continues its pursuit of a banking license in the UK, a process that has been ongoing for almost two and a half years. While the company had previously hinted at the imminent issuance of the license, it has now decided not to comment on the status of its application.

Revolut, founded by Nik Storonsky and Vlad Yatsenko, initially disrupted the cross-border payments market and has since expanded its services to include crypto trading, savings, wealth management, and banking for small and medium-sized businesses. It already holds a full banking license in Lithuania since 2021, allowing it to offer banking services across the European Economic Area. With over 30 million retail customers worldwide, it has become one of the most valuable private tech companies in the UK, with a valuation of $33 billion.

Despite some setbacks in 2023, including delayed financial reports and concerns about revenue accuracy, Revolut continues its rapid growth, rivaling traditional banks like Lloyds Banking Group and NatWest in terms of customer reach.

Related Story:  Criminal Groups Exploit System Flaw To Defraud Revolut US Of $20M

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