UK Fintech Stenn Collapses into Administration Amid Money Laundering Scrutiny

UK-based fintech firm Stenn, once valued at $900 million, has entered administration following an investigation linked to a U.S. money laundering case. HSBC Innovation Bank, a creditor to Stenn, filed an application with London’s High Court last week to place two of the company’s UK units into administration.

The investigation into Stenn’s activities began after U.S. authorities unsealed criminal indictments mentioning the company and its Russian founder and CEO, Greg Karpovsky, according to the Financial Times. While neither Stenn nor Karpovsky has been formally accused of wrongdoing, sources told the publication that the probe uncovered “potentially suspicious transactions.”

The U.S. indictment, issued in 2020, alleged that Stenn Assets UK had received $1.7 million from a Singaporean company linked to Feliks Medvedev, a Russian citizen who has admitted to running an unlicensed money transmitting business that moved over $150 million.

In response, Karpovsky stated he is “co-operating” with administrators and firmly denied any misconduct. “I am obviously concerned about any allegations of impropriety against me and I deny any wrongdoing in connection with Stenn,” he told the Financial Times.

Stenn, founded in 2015, specialized in invoice financing, leveraging technology to evaluate credit risks and provide quick funding to businesses. The company gained support from major financial institutions, including Barclays and Citigroup, which partnered with Stenn in 2022 to assist small businesses. That same year, private equity firm Centerbridge Partners invested $50 million in Stenn, valuing the company at $900 million.

However, the company’s history has not been without controversy. In 2018, auditor EY resigned, citing “concerns regarding certain related party transactions.”

Before founding Stenn, Karpovsky was the head of Eurokommerz, a Russian invoice financing firm that defaulted on its debt and went insolvent in 2008. In 2018, U.S. hedge fund HBK Investments filed a fraud lawsuit against Eurokommerz but later withdrew the claim. Karpovsky distanced himself from the allegations, stating, “Any potential wrongdoing in that business is proved to have taken place long after my departure from the company.”

Karpovsky also served as a director and shareholder of Silverbird Global, another UK fintech, which entered administration in March after its management flagged potential violations of Russia-related sanctions.

HSBC, Barclays, Citigroup, and Centerbridge Partners all declined to comment on the matter.

By fLEXI tEAM