Lithuania’s central bank has revoked the license of a local fintech involved in the Wirecard scandal due to major violations of anti-money laundering and terrorist financing rules.
Munich prosecutors suspect that UAB Finolita Unio, a fintech registered in Vilnius, the capital of Lithuania, was used to steal more than 100 million euros from Wirecard just before the collapse of the German payment company, has reported the Financial Times last month.
Bank of Lithuania said Finolita had treated anti-money laundering and anti-terrorist financing rules “irresponsibly”, failing to assess its clients’ risks and negligently verify their identity and beneficiaries workforce.
The Finolita case has given rise to close scrutiny from Lithuania which, after the UK’s departure from the EU, has the largest number of fintechs in the bloc. Some Lithuanian and German politicians have called Finolita a “wake-up call” for the country on the need to keep up with the rapidly changing fintech sector.
Marius Jurgilas, a supervisory board member of the Lithuanian central bank, told the FT on Tuesday that he would be “unhappy” if there was a perception that “we might be under pressure”.
The Lithuanian central bank contacted local payment companies in June 2020 after the German financial regulator belatedly acknowledged problems at Wirecard, which went bankrupt soon after.
He identified problems at Finolita and opened a formal investigation in the fall of 2020. The investigation revealed that Finolita had failed to comply with the rules relating to international sanctions and âinsufficiently supervisedâ operations of persons linked to it. ‘business.
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German prosecutors suspect that part of a loan of 100 million euros granted by Wirecard in March 2020 to a subsidiary of the owner of Finolita, the Singaporean group Senjo, and processed by the Lithuanian fintech, has been channeled to the commander second now fugitive from Wirecard, Jan Marsalek. .
Jurgilas said a lesson from Finolita was to “trust no related parties”. He added that this was “not the first” time that the central bank has stripped a fintech of its license and added: “I cannot pretend that in the future there will be no more cases. . . I don’t think that proves or disproves anything. It is the nature of the world. It’s not black or white, it’s shades of gray.
Finolita said the revocation of her license was “extremely harsh”, not least because she had notified the central bank of suspicious payments and was in the process of selling herself to new investors, having already transferred voting rights from Senjo to an independent trustee.
He added he would appeal the ruling, which he called “bad news for every financial market participant” as companies would try to “hide [their] errors rather than trying to openly solve a problem â.