Days before the planned temporary depature of its CEO, London fintech Wise has been accused of ‘innapropriate’ controls over financial sanctions rules by a government watchdog.
Wise permitted a cash withdrawal held by a company owned or controlled by a person under the government’s Russia sanctions list in late June, according to the Office of Financial Sanctions Implementation (OFSI).
The £250 cash withdrawal, while small, was considered a “moderately severe” breach of the sanctions rules, according to the OFSI, though it did not issue a fine.
“Wise’s policy at the time of the breach...was inappropriate in managing sanctions risks,” the OFSI said.
“A lack of staff availability to review sanctions alerts at weekends also led to a material delay in the proper restrictions being placed on the Designated Person’s account and debit card.”
According to the OFSI, Wise has sinced changed its policy with respect to debit cards, such that both a customer’s account and any associated cards are immediately blocked pending review by the specialist sanctions team where there is a possible name match with a designated person.
Wise CEO Kristo Kaarman, who co-founded the London-based fintech in 2011, revealed earlier this year he plans to step away from the firm between September and December 2023 to spend more time with his family. CFO Matthew Briers also intends to quit the board by the end of March 2024.
A Wise spokesperson said: “We voluntarily reported this ATM withdrawal to OFSI, undertook an immediate review of our processes and implemented the necessary internal system changes to prevent this type of transaction going forward.
“We take this matter very seriously. We remain committed to ensuring that our day-to-day operations are in compliance with all relevant regulatory requirements, and to working openly and collaboratively with our regulators.”
Wise shares initially fell by 5% to 612p on the news, but quickly recovered and are now flat for the day at 644.4p.
