UK Regulators Discover Problems With Revolut’s Audit Of Its Crypto-Friendly Neobank

According to the Financial Times, UK financial regulators have discovered weaknesses in Revolut‘s auditing procedure, a neobank that provides services for investing in cryptocurrencies.

According to a Financial Reporting Council assessment from July, the audit of an unnamed “financial services provider” by accounting firm BDO was “inadequate” and exposed the company to the “risk of an undetected material misstatement.” According to sources with knowledge of the situation who were contacted by the Financial Times, this unnamed company is Revolut.

According to the FT, the second-most valuable private fintech business in Europe is currently under pressure to strengthen its internal controls — the procedures that guarantee its financial reporting is accurate — in order to comply with legal and regulatory obligations.

The FT was also cautioned by a source that BDO’s submission of its accounts, the majority of which are due at the end of the month, would be delayed as a result of a more stringent approach. Revolut Newco UK Ltd., the firm created to contain the company’s postponed UK banking license, has yet to file its annual reports with the Financial Conduct Authority.

Nikolay Storonsky – Revolut could be prosecuted for failing to submit an account on time

The neobank must strengthen “unsexy things like its back office and controls,” according to a source with knowledge of the matter, because it “has to have a back office like a bank and it’s got the culture of a tech firm.”

The resignations of several key members of the company’s risk and compliance departments, including the UK heads of risk, compliance, and money laundering, as well as Storonsky’s complaint in an interview with City AM about the length of time it is taking regulators to review the company’s application for a banking license, have coincided with the announcement of this information.

A permanent license allowing Revolut to provide cryptocurrency services in the UK is still pending. However, the Cyprus Securities and Exchange Commission most recently granted it permission to offer cryptocurrency services and introduce a number of new tokens.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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