Revolut Fined €3.5 Million by Lithuanian Central Bank Over Anti-Money Laundering Failures

Britain’s most valuable start-up, Revolut, has been fined €3.5 million ($3.83 million) by Lithuania’s central bank following a routine inspection that uncovered failures in the company’s anti-money laundering (AML) processes.

In a statement issued on Tuesday, the central bank said the inspection revealed “violations and shortcomings in the monitoring of business relationships and operations,” which “led to (Revolut) not always properly identifying suspicious monetary operations or transactions.” The bank did not disclose specific examples or additional detail regarding the breaches.

Revolut, which operates in the European Union under a Lithuanian banking licence, responded by emphasizing that the investigation had not revealed any actual instances of money laundering. A company spokesperson said: “Revolut Bank is committed to the highest standards of regulatory compliance, and cooperated with the (Lithuanian central bank) in taking immediate action to address the procedural deficiencies.”

The fintech firm, headquartered in London, is under the regulatory oversight of both the European Central Bank and Lithuania’s central bank. Following the inspection, Revolut signed a settlement agreement with the Lithuanian regulator and has since taken steps to correct the identified deficiencies.

The fine is the largest ever imposed by Lithuania’s central bank and was calculated based on the seriousness of the violations and the revenue levels of Revolut Holdings Europe, which oversees Revolut’s regulated operations across the European Economic Area.

In a comment on the fine’s scale and significance, a source at Revolut reiterated that there were no confirmed cases of money laundering identified during the investigation. The source noted the findings primarily related to enhancements in the company’s control mechanisms. They also highlighted that the fine amounted to less than 0.5 percent of Revolut’s 2023 revenue—significantly below the maximum possible penalty of 10 percent permitted under Lithuanian anti-money laundering laws.

Revolut has surged in value in recent years, reaching a $45 billion valuation in August through a secondary share sale involving both new and existing investors, making it more valuable than some of Europe’s traditional banking giants. The company also reported a record-breaking pretax profit of £438 million ($559.5 million) in 2023.

The fine against Revolut comes amid a wider scrutiny of fintech firms and challenger banks regarding their AML compliance. In the UK, Starling Bank faced a £29 million fine from the Financial Conduct Authority (FCA) last year, following accusations of “shockingly lax” financial crime controls. Meanwhile, Monzo disclosed in its June 2023 annual report that it is under civil investigation by the FCA for AML-related issues, following the regulator’s decision to downgrade the case from a criminal matter.

By fLEXI tEAM