The co-founder and CEO of London-based fintech Wise – formerly TransferWise – is being investigated by the UK’s financial regulator after he defaulted on tax payments.
Wise said this morning that the Financial Conduct Authority (FCA) has “commenced an investigation regarding the regulatory obligations and standards” of company co-founder Kristo Käärmann.
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.
“The board takes Kristo’s tax default and the FCA’s investigation very seriously,” said Wise chair David Wells.
“After reviewing the matter late last year, the board required that Kristo take remedial actions, including appointing professional tax advisers to ensure his personal tax matters are appropriately managed.”
“The board has also shared details of its own findings, assessment, and actions with the FCA and will cooperate fully with the FCA as and when they require while continuing to support Kristo in his role as CEO.”
Wise: a British success story
Wise has been a major success story for UK tech, becoming a unicorn in 2017 and then going public in London at a valuation of just under £9bn in a huge boost for London’s stock exchange.
The firm has lost a bit of steam since then, at one point reaching a valuation of close to £12bn, but dropping to around £4bn, due in part to a significant rise in competition in international remittance fintechs.
The company specialises in the transfer of funds, particularly internationally, having been founded as a result of the co-founders struggling to transfer money from their home in Estonia to UK bank accounts.
Wise in February announced it would be restricting payments made to accounts in Russia in response to the invasion of Ukraine by Russian forces.
UKTN has reached out to Wise for further comments.