Challenger bank Revolut accused of possible compliance violation, denies allegations

UK-based challenger bank Revolut allegedly failed to block potentially suspicious transactions after the company had turned off an automatic system responsible for tracking transactions, Telegraph reports. The newspaper claims this might have led to fraudulent transactions and money laundering.

Revolut reportedly carried out an internal investigation, and the Telegraph claims Revolut drafted a letter to the Financial Conduct Authority where the head of legal Tom Hambrett explained, "The investigation concluded that the original decision to turn off the transaction-halting mechanism was erroneous and implied a remediable systems and controls failing." However, the startup claims the FCA has never been contacted as no fraudulent transactions have taken place.

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The company had its new sanctions screening system turned off between July and September of 2018 due to malfunctions—the roll-out of the new systems resulted in too many false-positive flags. Nik Storonsky, Revolut CEO, claims due to insufficient calibration of the systems the company “decided to temporarily revert to our existing controls, while we continued to enhance the new systems.”

Storonsky maintains that all transactions have been reviewed, and there have been no breaches identified.

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