A subsidiary of UK fintech Wise has been fined $360,000 (£309,000) over an anti-money laundering breach in the United Arab Emirates.
Abu Dhabi’s financial regulator said that Wise Nuqud “did not establish and maintain adequate systems and controls to ensure full compliance” with the country’s anti-money laundering rules.
Wise Nuqud is a wholly owned subsidiary of London-headquartered Wise, formerly TransferWise.
The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market said Wise failed to identify the source of funds being held by customers flagged as high-risk.
These accounts were then able to carry out transactions on the Wise platform, but the regulator said there was no evidence of money laundering actually taking place.
Wise also failed to “consider customer nationality as part of its risk-based assessment of its customers”, the FSRA said.
A spokesperson from Wise told UKTN: “Wise takes its responsibility to protect its customers and prevent money laundering very seriously. We have worked closely with the FSRA to resolve their concerns, and no instances of money laundering or other financial crime were identified.”
The spokesperson added: “Safety and security are of paramount importance and we have robust controls in place to verify customers and to detect and prevent any potentially suspicious activity. Wise will continue to invest in maintaining and improving our AML processes to the highest standards in partnership with regulators around the world.”
The fine follows an investigation of Wise’s CEO, Kristo Käärmann, being launched by the FCA after he defaulted on tax payments.
Käärmann was previously included on HM Revenue and Customs’ deliberate tax defaulters list in September 2021, when he failed to pay £720,495 and was fined by the tax authority.
Founded in 2010, Wise is a fintech that allows customers to transfer funds across international borders. The company went public in July 2021, listing on the London Stock Exchange.