FCA wants to know if Revolut allowed money to leave flagged accounts
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The UK financial regulator, the Financial Conduct Authority (FCA) recently launched an investigation into Revolut.
The regulator is looking into Revolut’s flagged account; specifically, whether the digital bank allowed money withdrawals from such accounts. The accounts in question were flagged as suspicious by the National Crime Agency, and by law, Revolut should not allow their owners to withdraw funds stored within from the moment accounts were marked as suspicious.
#FT reporting today that #Revolut is “in talks” with #FCA “about failures that allegedly allowed money to be released from accounts flagged by @NCA_UK as suspicious” https://t.co/padlUxq2Di [ excerpt below ]
| story by @LauraNoonanFT + @journosooz https://t.co/rRTaILkx6I pic.twitter.com/wQMxbSOVyj
— Charterhouse Square (@CharterhouseSq) September 30, 2023
Revolut admits to losing funds from flagged accounts, disagrees on the amount
The regulator is currently talking to Revolut about an alleged failure that took place between July and August of this year. The regulator believes that as much as 1.7 million GBP was released from flagged accounts, according to sources familiar with the matter.
Revolut reached out to the bank about the issue recently, but it said that the amount that was released was only 500,000 GBP, not nearly as much as 1.7 million.
The company’s newest brush with the regulators comes while it is still waiting for the UK banking license. At this point, Revolut has been waiting for over two years due to the lengthy process that comes before receiving the license. Furthermore, some believe that the FCA has concerns that emerged during auditing, compliance, and corporate culture issues in general.
For now, there is still no word on whether Revolut will receive the license any time soon, and with this latest controversy, the FCA will have even more reason to consider the bank and its systems carefully.
Revolut suffered numerous issues in 2023
About a month ago, it was uncovered that the company will delay filing its annual account for the second year in a row. Its 2021 accounts finally got filed in March 2023. Even so, the auditor, BDO, expressed concerns regarding the matter, stating that it could not verify as much as 477 million GBP of revenue. The auditor also noted that it could not vouch for their “completeness or occurrence” as a result of the configuration of the bank’s IT systems.
These and similar issues have followed Revolut since it started the process of receiving the license in the UK. With that in mind, it is understandable why the local authorities hesitate to provide it with a license.
Earlier this year, in July, the company experienced another problem when organized criminals exploited discrepancies in its US and European payment systems, resulting in over $20 million theft.
Before that, reports from May of this year were suggesting that the Bank of England might reject Revolut’s January 2021 license application due to questions regarding the veracity of its balance sheet and accounts.
