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UK’s FCA Reportedly Investigating Revolut, a Digital Bank, regarding Red-Flag Accounts

Revolut, the digital bank, is currently in discussions with the UK’s Financial Conduct Authority (FCA) over potential failures that allowed funds to be released from customer accounts flagged by the National Crime Agency (NCA) as suspicious. This development adds to the list of issues impacting the fintech firm as it awaits its UK banking license.

The FCA, which monitors Revolut’s payments unit, is holding talks with the company alongside the support of the NCA. The reported failures occurred between July and August of this year, according to sources familiar with the matter cited by the Financial Times.

Sources claim that around £1.7 million ($2.3 million) was transacted from the flagged accounts, although Revolut informed the FCA that only £500,000 ($675,000) had been transferred. The NCA has the authority to limit the activities of accounts suspected of involvement in illicit activities such as money laundering, allowing law enforcement agencies to conduct further investigations.

It is important to note that Revolut’s anti-financial crime controls are overseen by regulators worldwide. However, concerns have arisen regarding a potential flaw or failure in the fintech firm’s payments solution that allowed US fraudsters to steal over $20 million.

This latest issue in the UK comes to light as discussions continue regarding Revolut’s banking license application, which has been pending for almost two and a half years. Previously, Revolut had stated that it expected the license to be granted soon, but it has now chosen not to comment on license applications.

Revolut’s management commented, “As a global financial institution, we work closely with regulators around the world, ensuring that we maintain strong governance and compliance practices across our business. Since our founding in 2015, Revolut has obtained over 70 licenses across a range of financial services, and we are constantly building on this to ensure our 30 million plus customers can continue to use our industry-leading products with trust and confidence.”

Revolut, founded by Nik Storonsky and Vlad Yatsenko to streamline cross-border payments, has expanded its services to include crypto trading, savings products, wealth management, and banking for SMEs. Notably, the company recently announced that its 2022 accounts will be delayed until the end of December 2023.

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