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N26 fined €4.25m for weak money-laundering controls

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German monetary watchdog BaFin has publicly rebuked on-line financial institution N26 for weak anti-money laundering controls and imposed a €4.25m high quality on the fast-growing lender.

BaFin has already ordered the enterprise, which is considered one of Europe’s most extremely valued fintechs, to strengthen its money-laundering prevention twice since 2019. In a uncommon transfer this Could, BaFin additionally put in a special supervisor to observe the financial institution.

The €4.25m high quality was paid in July however solely made public by the regulator on Wednesday. N26 mentioned in a press release that it associated to the late submitting of near 50 suspicious exercise reviews in 2019 and 2020.

The high quality comes in the future after Germany’s largest on-line financial institution, ING Germany, was criticised in court docket by a BaFin consultant for its gradual response to suspicious trades by a consumer, who later admitted to large-scale insider buying and selling.

N26, which earlier this 12 months mentioned that it was working in the direction of a public itemizing, was valued at $3.5bn in a funding round in 2020. It was based in 2013 and has raised near €800m from buyers together with Tencent, Allianz X and Peter Thiel. It says it has greater than 7m shoppers in 25 nations.

The financial institution mentioned in a press release that it had already addressed the issues behind the BaFin high quality. “All measures to enhance reviews of suspicious actions have been applied earlier this 12 months,” N26 mentioned, including that it takes its “accountability within the battle towards the rising menace of world monetary crime, and within the prevention of cash laundering, very significantly”.

In Could, BaFin urged the lender to “rectify deficiencies each in IT monitoring and in buyer due diligence” and to “be sure that it has the satisfactory personnel, technical and organisational assets to adjust to its obligations beneath anti-money laundering regulation”.

N26 mentioned it has taken “quite a few detailed measures” to strengthen its anti-financial crime controls.

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