Digital BankingSavings and Investment
The regulator was first approached by concerned employees back in February 2019.
Image source: Wirex co-founders Pavel Matveev and Dmitry Lazarichev/Wirex
The Financial Conduct Authority (FCA) has decided to crack down on crypto and fiat currency payments provider Wirex after money laundering allegations surfaced, according to an investigation by Fintech Futures.
In response to the article, Wirex’s legal team said: “The article in question contains a number of false, defamatory and misleading statements, including the allegations that money is being laundered through the company, and Wirex is currently considering its legal options to have the article removed immediately.”
Concerns were allegedly first raised all the way back in February 2019 after several Wirex employees independently approached the FCA with concerns that customer money was being laundered through the company, according to the report by Fintech Futures.
The employees, one of which was in a senior compliance position, also reportedly raised concerns that Wirex was trading crypto that wasn’t the company’s to trade.
A former employee told Fintech Futures: “The FCA turned a blind eye. [Wirex is] telling customers they’re FCA regulated, but the irony is the FCA doesn’t care.”
Since going to the FCA with their concerns, one of the employees was made redundant and the other was given a significant pay rise.
Despite the serious allegations, the FCA reportedly only went to Wirex last week and, as a result, Wirex announced its decision to temporarily pause recruiting new UK customers.
Wirex was found to be in direct violation of the Fifth Anti-Money Laundering Directive (5AMLD), which came into force in January 2020, and protects consumers against new money laundering threats that have arisen with the growing popularity of digital currencies.
In a statement Wirex said it “will dedicate resources to further strengthen its 5AMLD compliance protocols, conforming with the updated best practice guidelines set by the UK regulator.”
Wirex is not the first fintech to have found itself in hot water with the UK’s regulator.
In fact, Wirex’s former payment processor Wirecard had its UK activities frozen by the FCA last June after a €1.9bn black hole was discovered on its balance sheet.
Back in November 2020, fledgeling fintech Lanistar was slapped with a now-reversed fraud warning.
After splashing the cash on a massive social media campaign, the FCA flagged Lanistar as a potentially fraudulent company operating without the proper licences or regulations. Just a few days later, it backtracked and performed something of a change of mind and removed its warning against the firm.
Wirex claims to have nearly 3.5m customers across 130 countries and has offices in London, Singapore, Kyiv, Tokyo, Toronto, Dallas, Dublin and Atlanta.