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Revolut faces scrutiny over payments from suspicious accounts

Revolut accounts
Image credit: Proxima Studio / Shutterstock

The UK financial regulator has approached Revolut over an alleged failure to prevent money from being released from suspicious accounts.

The Financial Conduct Authority (FCA) has been in talks with the fintech over its inaction in preventing payments from accounts that have been flagged by the National Crime Agency (NCA), first reported by the Financial Times.

The alleged Revolut slip-up was said to have occurred between July and August, with as much as £1.7m potentially having been released from accounts deemed suspicious by the NCA.

Revolut notified the financial watchdog of the problem, however, sources have told the FT that the amount claimed by the company is £1.2m less than what the total figure could be.

The NCA flags accounts as suspicious due to potential links to money laundering and other financial crimes.

Revolut declined a request to comment.

The error represents the latest regulatory issue faced by the unicorn, which is still waiting on approval for its banking licence from UK regulators.

In July, a loophole in the company’s payment system in the US was exploited by criminals who stole more than $20m, though the funds were only stolen from the company and did not affect customers’ accounts.

In March, an audit of the company’s 2021 accounts found that three-quarters of the £636m of reported revenue could not be verified.

Revolut’s latest accounts were due by the end of September, however, it was granted a three-month extension.

Revolut has been keen to offer banking services in the UK, however, regulatory scrutiny has proved to be a challenge for the firm, which was once the most valuable private tech firm in Europe.

No formal rejection of the company’s banking licence has been announced, however, it was reported in July that the Bank of England was leaning towards refusing the application.

Read more: What next for Revolut if its UK banking licence is rejected