Revolut, the UK-based fintech widely known for its crypto-friendly nature, valued at $45 billion, has been fined €3.5 million by Lithuanian regulators. This is the company’s largest penalty to date, following failures in its anti-money laundering (AML) processes.
The Bank of Lithuania announced that Revolut had shown significant shortcomings in its transaction monitoring systems. These gaps made it difficult for the bank to properly detect suspicious financial activity among its users, the Financial Times reported.
Lack of Proper Monitoring and Oversight
According to the Central Bank, Revolut did not always identify questionable transactions or monetary operations. These issues stemmed from flaws in how the bank monitored customer activity and managed business relationships.
Regulators stated that while there was no confirmed money laundering, the control failures left the platform vulnerable. This raised concerns over the reliability of Revolut’s internal compliance systems, especially given its scale of operations across Europe.
Previous Regulatory Setbacks
This is not the first time Lithuanian authorities have fined the fintech. In 2022, Revolut was hit with a €70,000 penalty for failing to file its financial statements on time.
Despite obtaining a full European banking license from Lithuania in 2021, Revolut has continued to face regulatory scrutiny. Its application for a UK banking licence was delayed for years due to multiple compliance issues.
These included warnings from its audit, or BDO, which flagged possible inaccuracies in revenue reporting for 2021 due to flaws in Revolut’s IT systems.
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Company’s Response to the Penalty
Revolut said in a statement that it had taken prompt action and was still dedicated to adhering to all rules. To close the holes in its processes, the firm collaborated closely with the Bank of Lithuania.
According to a person with knowledge of the situation, the regulator did not discover any real money laundering incidents. They further stated that the fee was less than 0.5% of the business’s 2023 revenue, which is significantly less than the maximum of 10 percent permitted by Lithuanian AML regulations.
Regulators Increasing Scrutiny on Digital Banks
This development comes as digital banks face growing regulatory pressure in Europe and the UK. Neobanks are frequently ill-equipped to manage the risks of financial crime, as the UK Financial Conduct Authority has cautioned on numerous occasions.
Last year, Starling Bank was fined £29 million for what regulators called dangerously weak anti-crime measures. Monzo Bank is also under investigation by UK regulators for possible lapses in its AML practices.
Revolut’s €3.5 million fine is a strong signal from Lithuanian regulators that fast growth cannot come at the cost of compliance. As the company pushes toward becoming a full-scale bank in the UK, the pressure to strengthen internal controls is only increasing.
While the fine won’t significantly impact Revolut’s financial standing, it could influence how other regulators approach fintech oversight in the future. For now, the company says it’s focused on making improvements and avoiding similar setbacks down the road.
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