Wise under investigation in Europe over money laundering controls

Fintech firm Wise is being investigated by Belgian authorities over money laundering concerns in a lengthy probe reportedly involving more than £400 million (€462.59 million) worth of transactions.

Wise shares slumped on Monday – down 9 per cent in afternoon trading – after the firm confirmed it was responding to questions from Belgian authorities.

The Belgian public prosecutor’s office told French media the investigation had been launched last year and was “at an advanced stage and nearing its conclusion”.

It said: “The findings primarily concern the use of Wise accounts for criminal purposes, with indications of non-compliance with anti-money laundering legislation, particularly due to a failure to identify customers and their activities.”

The group’s stock plummeted by nearly a fifth at one stage early on Monday after Wise confirmed the prosecutor in Brussels had lodged queries over its business.

It followed a report by the Bureau of Investigative Journalism revealing the investigation, and claiming the probe related to transactions worth about €500 million.

Wise said: “We are currently working with the Brussels prosecutor to respond to queries about our business, as we routinely do with regulators and law-enforcement authorities.

“His office’s inquiries are still incomplete and no specific findings have been shared with us to date.

“As such, it would be speculative for us to comment on any allegations.

“We will continue to engage with the Brussels prosecutor’s office if and when any specific findings are made available to us.”

Wise said that requests for information from authorities were “a normal part of operations and are not, in themselves, indicative of non-compliance with anti-money laundering requirements or of any wrongdoing”.

Its European business is based in Belgium, from where it serves the rest of Europe and the EU.

The firm has a secondary listing on the London market after switching its primary listing to New York last month to take advantage of a larger stock market and bring on board new investors.

It has grown significantly in recent years, having started as a pure money transfer firm, and now boasts more than 19 million customers worldwide and handles 4.7 million transactions a day.

The group, which was launched in 2011 under the name TransferWise, was fined 360,000 US dollars in 2022 by Abu Dhabi’s financial services regulator for breaching anti-money laundering (AML) requirements.

Wise said on Monday that about a third of its workforce was “dedicated to protecting our customers from financial crime and this focus is shared across all of our teams”.

The firm said it verifies customers before they open an account, reviews transactions and monitors “hundreds of data points in real time as customers use our products”.

“Combating financial crime is an industry-wide challenge that Wise takes extremely seriously,” Wise said.