Lithuania 'consulting' UK banking watching about Revolut after press reports
The Bank of Lithuania has made inquiries with the UK’s Financial Conduct Authority about UK fintech “unicorn” Revolut, after issues were raised in the press.
The BBC reported earlier this month that the FCA investigated Revolut in 2016 after a whistleblower raised concerns about the company’s culture and compliance. Wired magazine also recently published a feature highlighting issues with Revolut’s culture.
Separately, the Telegraph reported on apparent issues with sanctions screening controls at Revolut. At the time, the FCA said it was seeking more information from the startup. Yahoo Finance UK understands that the FCA is still assessing the issues raised. The FCA declined to comment.
Marius Jurgilas, a board member of the Bank of Lithuania, told Yahoo Finance UK: “Of course we are also reading the press, the UK press, and we are investigating, if I can say that, unofficially.
“Because the institution that the information is available about is licensed in the UK, the home regulator is the FCA and the FCA is the one we are consulting with.”
Revolut is one of Britain’s hottest startups. It was founded in 2015 by a former Credit Suisse currency trader and began as a prepaid card linked to an app that let people buy ultra-cheap currency. It has expanded into everything from insurance to cryptocurrencies.
READ MORE: $1.7bn startup Revolut's bank plans could face tough culture questions
The startup was valued at $1.7bn (£1.2bn) last year, making it a so-called “unicorn”, and has raised money from top venture capitalists in Europe and Silicon Valley. Revolut has 4m users globally and signs up thousands of new accounts each day.
Revolut is headquartered in London and licensed with the FCA but also has an e-money licence and a banking license with the Bank of Lithuania. Jurgilas said the banking app has about 100,000 customers in the Baltic state.
“It’s very important to have a good cooperation between the home and host regulators,” Jurgilas said.
“It’s natural that a respectable regulatory authority is not only communicating with a firm directly but also is aware of information available in the public domain. If we see that information as relevant, we’ll act on that.”
A spokesperson for Revolut said: “We have always approached our application and our dealings with the Lithuanian regulatory authorities with complete transparency and will continue to do so.
“We do not have anything to hide and would fully expect regulators, across markets, to routinely discuss any applications they receive from large international operations. We remain committed to the establishment of our operations in Lithuania.”
READ MORE: Revolut calls in ex-Daily Mail editor and hunts defamation lawyer as negative headlines continue
Aside from the UK press reports, Revolut has faced local controversy in Lithuania. Politicians have suggested that the Bank of Lithuania, which regulates financial activity in the country, does not have adequate resources to police a business of Revolut’s size.
Lithuania’s finance minister has pledged to boost staffing numbers in response and Jurgilas told Yahoo Finance UK: “Our understanding is we have the needed supervisory capability to supervise an entity which is just in the beginning of entering the market.”
He added: “In the context of the last three to four years, we have seen multiple institutions going through the supervisory services of the Bank of Lithuania with much more complicated business models compared to the one we are discussing right now.”
Lithuanian politicians have also raised questions about Revolut’s links to Russia. The startup currently faces a third investigation by parliament into whether it poses a national security threat, after twice being cleared by the same committee.
Jurgilas said that these concerns were outside the purview of the Bank of Lithuania and the committee examining the national security question is “the competent authority to decide on that.”
Jurgilas’ comments came during an interview at the Paris Blockchain Week summit, a two-day conference to showcase the French capital as a hub for fintech.
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