Monzo faces FCA money laundering probe

Monzo is going through a legal investigation by the Financial Conduct Authority because the watchdog cracks down on suspected money laundering breaches.

The financial institution faces the instant problem of an investigation by the FCA, which ordered it to nominate a 3rd get together to review its monetary crime controls in August final year.

On May 7, the regulator instructed Monzo it had began an investigation into its compliance with monetary crime regulation associated to potential breaches of anti-money laundering guidelines and monetary crime controls from October 2018 to April 2021.

Monzo stated the investigation was wanting into each legal and civil legal responsibility and stated it was cooperating with the investigation.

If the FCA brings a legal case towards Monzo, it might face doubtlessly limitless fines. 

A Monzo spokesperson stated: “The prevention of financial crime is an issue that affects the entire banking industry and one which Monzo is taking extremely seriously. Over the past year we have made major investments in our controls in this area as a priority and will continue to invest heavily in this part of the business. The FCA’s investigation remains at an early stage. Our operations are unaffected and we remain committed to serving our customers”.  

TS Anil, Monzo’s chief government, declined to remark additional.

It got here as Monzo warned in its annual report its heavy losses “cast doubt” on its means to proceed as a going concern and stated it could want to lift extra money after tapping traders for £200m over the past 12 months.

The digital-only financial institution’s losses widened to just about £130m within the year to February, up 14pc from £113.8m within the earlier 12 months. This rate had slowed after losses greater than doubled the year earlier than.

Total revenues elevated by £12m to £79m, considerably down on the 237pc enhance it loved the year earlier than. The financial institution stated it hoped to show in the direction of profitability in 2022 and that revenues might double.

Monzo is backed by enterprise corporations Accel, Passion Capital and General Catalyst in addition to hundreds of retail traders who purchased shares throughout a number of crowdfunding drives.

The outcomes cap off a turbulent year for the financial institution, which noticed the departure of its founder and former chief government Tom Blomfield. Mr Blomfield cited stress and burnout for his choice to depart the company in January this year.

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