The digital bank N26 was not able to get its problems with money laundering and fraud under control.
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The financial supervisory authority Bafin is now apparently losing patience.
The Handelsblatt reports on a list of around 1600 accounts opened at N26 between May 2019 and July 2021, which appear to have been used for fake shops and fraudulent eBay accounts.
At N26, they seem to have gotten the message. On Friday, a day after media reports about Bafin’s threats, the smartphone bank announced that it was making major changes to its management.
In addition to appointing a new financial director, the bank also appointed a new head of risk management, as well as a chief to monitor progress in its anti-money laundering policy.
“Extending our management to include governance, risk management, and anti-money laundering functions is an important step in our journey to become a truly global digital bank,” said co-founder and CEO Valentin Stalf.
For N26, a new reprimand from the regulator threatens to come at a very bad time. The bank is said to be currently negotiating a new round of capital with potential investors.
According to some observers, N26 would like to raise up to $100 million. This would mean the company would be valued at around $10 billion in that new operation. The bank itself has so far never wanted to comment on the reports of a possible capital operation.
However, N26 is by no means the only challenger bank under the scrutiny of the regulators.
Monzo, a British sector partner of N26, admitted earlier this month that the British financial regulator had also launched an investigation because the smartphone bank was also not very strict with its anti-money laundering checks for years.