Lithuanian regulator imposes record €3,5m fine on Neobank Revolut

Revolut, the British-Lithuanian neobank that recently stepped up its expansion plans in Belgium, has been reprimanded by the Lithuanian financial regulator for inadequate anti-money laundering controls, resulting in a fine of €3,5 million euro.

The Lithuanian Central sofa found that Revolut had shortcomings in its procedures to check for customers engaging in money laundering or other suspicious financial transactions, following a thorough review of the bank.

The regulator has therefore decided to impose a fine of 3,5 million euros on Revolut, which operates from London but is registered as a bank in Lithuania. This is the largest fine ever imposed in Lithuania for money laundering.

Repeated warnings

This isn’t the first time Revolut has come under scrutiny for inadequate anti-money laundering controls. Six years ago, the UK’s Financial Conduct Authority launched an investigation into Revolut after a whistleblower reported that the bank had disabled its electronic systems for detecting suspicious money flows for three months.

Unwelcome timing

The timing of this fine is unfortunate for Revolut. The smartphone bank, which operates in 38 countries with 50 million customers and has a valuation of $45 billion, has just started a spring offensive to strengthen its position in Belgium.

According to Revolut itself, the bank currently has 700.000 active customers in Belgium. The group hopes to increase this number significantly in the coming years. From May, these customers will receive a Belgian IBAN code for their accounts. This means that Revolut users no longer have to declare their accounts with the bank as foreign accounts with the Belgian National Bank. Now that this obstacle has been removed, Revolut hopes to break through as a house bank and challenge the traditional players in the financial sector.

Questions & Answers

Why is Revolut being fined?

Revolut has been fined €3,5 million by Lithuania’s financial watchdog over inadequate anti-money laundering controls.

Is this the first time Revolut has been investigated for failings in anti-money laundering controls?

No, six years ago, the UK's Financial Conduct Authority launched an investigation into Revolut after reports that the bank had disabled its systems to detect suspicious money flows.

What are Revolut's growth plans in Belgium?

Revolut recently stepped up its expansion plans in Belgium, hoping to significantly increase the number of active customers in the country. Starting in May, these customers will receive a Belgian IBAN code for their accounts, meaning they will no longer have to declare their accounts as foreign accounts with the Belgian National Bank.