Wise hit with AML Fine in Dubai

London-listed fintech firm Wise has been slapped with $360,000 (£307,801) fine by Abu Dhabi regulators today after a series of failures in its anti-money laundering controls.

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) announced today it had fined the money-transfer firm after finding it did not “establish and maintain adequate AML systems and controls” to ensure full compliance with its AML obligations.

In its charge sheet against Wise, the regulator said that it had failed to track and verify the source of funds on customers it had identified as high risk, as well as failing to properly obtain the approval of senior management to establish business relationships with those customers.

Wise also failed to consider customer nationality as part of its risk-based assessment of customers, the regulator said.

In a statement , chief of ADGM said it was “committed to ensuring that all regulated entities maintain high standards to address money laundering risks.”

“Where appropriate, the FSRA will take strong action to ensure firms comply fully with the anti-money laundering requirements in ADGM,” Emmanuel Givanakis added.

The watchdog said it had not traced any instances of money laundering resulting from the control failures however and had slashed an original penalty of $450,000 after Wise accepted the findings.

A Wise spokesperson told City A.M. in a statement that the firm “takes its responsibility to protect its customers and prevent money laundering very seriously” and had “worked closely with the Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority (FSRA) to resolve their concerns”.

“Wise will continue to invest in maintaining and improving our AML processes to the highest standards in partnership with regulators around the world,” they said.

The penalty adds to the woes of Wise howeafter it was announced that chief Kristo Kaarmann was under investigation from the Financial Conduct Authority after failing to pay a tax bill of £720,495 for the 2017-18 tax year.

Financial Conduct Authority (FCA) had “commenced an investigation regarding the regulatory obligations and standards to which Kristo is subject”. The watchdog has the power to rule that Kaarman is not a ‘fit and proper’ person to be running the firm.

The firm has also been grappling with a tumbling share price as growth tech firms have been hit by a sharp sell-off amid soaring inflation and market volatility.

Shares in Wise are trading down nearly 50 per cent since it floated in July 2021.Revenues at Wise have been booming despite the regulatory troubles however, with the firm announcing inn June that revenue had jumped 33 per cent to £560m in the year to the end of March

Article Credit: https://www.cityam.com/wise-hit-with-360000-fine-in-abu-dhabi-over-money-laundering-failures/