Wise fined £300k in Abu Dhabi after AML failure

By Amelia Isaacs on Wednesday 31 August 2022

Digital Banking

The regulator did not find any instances of actual money laundering by the Wise subsidiary because of the failures.

Wise fined £300k in Abu Dhabi after AML failure
Image source: Taavet Hinrikus & Kristo Käärmann/Wise.

Global tech company Wise has been hit with a $360,000 (£309,493) fine by the Abu Dhabi financial regulator over failures in its anti-money laundering controls.

Abu Dhabi’s Financial Services Regulatory Authority (FSRA) said it fined the firm after finding it “did not establish and maintain adequate AML systems and controls to ensure full compliance with its AML obligations”.

The fine has been imposed as a result of breaches made by Wise Nuqud, a wholly-owned Abu Dhabi arm of the fintech firm.

These breaches included a failure to identify and verify the source of funds or wealth by some customers identified as high risk before carrying out transactions on their behalf.

A spokesperson for Wise told AltFi it takes its responsibility to protect its customers and prevent money laundering “very seriously”.

“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,” the spokesperson said.

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

The FSRA said its review did not find instances of actual money laundering as a result of Wise’s AML systems and control failures.

As Wise did not dispute the findings and agreed to settle at the “earliest opportunity”, it will pay a reduced financial penalty instead of the full $450,000.

The regulator said Wise "has taken substantial steps to remediate the issues and deficiencies [...] including by conducting a gap analysis of its policies, systems and controls against the Regulator's AML and Federal AML requirements."

Wise’s new fine follows its billionaire co-founder and CEO Kristo Käärmann being investigated for failing to pay his taxes earlier this year.

Käärmann reportedly failed to pay £720,495 in taxes from 2017-2018 and was fined £365,651 as a result.

He is now being investigated by the Financial Conduct Authority and could be fined or barred from his position if he is deemed “not fit and proper”, but remains in place as CEO while the inquiry happens.

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