The UK’s financial watchdog has seized £2m from fintech firm QPay after it allegedly benefited from a $150m (£116.5m) payment fraud case in the US.
QPay Europe Limited claims to be a fintech startup offering due diligence and underwriting services. The firm has consented to a court order for the Financial Conduct Authority (FCA) to seize £2m held in QPay’s name under the Proceeds of Crime Act.
The FCA has claimed the money was the proceeds of criminal activity connected to an alleged US conspiracy to commit wire fraud against banks, credit card companies and other American financial service providers.
QPay is not currently alleged to be directly involved in this fraud conspiracy.
The fintech firm raised red flags for the FCA after its application to become a regulated UK company back in March 2020.
The FCA reports that QPay received the £2m as a supposed investment from software firm Fintech International Q Software WLL. The money, the FCA said, was moved repeatedly between different bank accounts across several countries, with none of these transactions being related to legitimate businesses.
QPay has since withdrawn its initial application to be regulated by the FCA.
The funds seized from QPay will be paid to the UK government, as ordered by district judge Cieciora at Westminster Magistrates’ Court.
“Account forfeiture orders are an important means of intervening and capturing illegal money and this action is a good example of what can be done,” said Mark Steward, executive director of enforcement and market oversight at the FCA.
“The funds will now be used to assist the FCA, and other authorities fight illegal activity. The FCA will continue to vet applications for authorisation to ensure firms meet our standards of integrity as well as competence,” Steward added.