Fintech firm WB21 caught in storm of allegations

Allegations about money transfer service WB21 have reached epic proportions.

On its website, WB21 calls itself a digital bank and offers account opening for 180 countries in 28 currencies.

As reported in November, FinTech Futures was contacted by a source that says two firms are owed $2 million via WB21. One of them the source currently works for, the other was a previous job. Those matters have not been resolved. Further, a very basic search on its name or other variations will reveal the nature and extent of the allegations being made. WB21 stated that the account issues might be compliance related, but could not discuss the matter further, without understanding the specific customer details.

In October, the US Securities and Exchange commission (SEC) revealed a civil lawsuit against Wintercap S.A., Roger Knox, Michael Gastauer and others, accusing WB21 N.A. Inc. of aiding and abetting its client Wintercap`s fraudulent sale of $165 million worth of shares in microcap stocks using the WB21 platform. The full document can be found on the SEC website.

In response to the SEC allegations, WB21 said: “WB21 and Mr Gastauer deny the allegations and any wrongdoing. The SEC accuses Mr Knox and Wintercap S.A. of securities fraud and other offences. Mr Gastauer has not been accused of fraud. There are no criminal proceedings against WB21 and/or Mr Gastauer.”

In the latest development, Juan F. Bolaños, general manager of Peru-based Blockchain Andina, contacted FinTech Futures with more evidence and the desire to go public on his name. To keep it brief, he made an international money transfer from his dollar account of WB21 to his BBVA Continental account in Peru. He explains that the money “does not appear in either of the two accounts and both the issuing bank and the receiver have not been able to tell me where the funds are”.

The amount of evidence, including screenshots, provided by Bolaños is comprehensive as he sought to resolve this. Items include an image of payment confirmation with WB21 and conversations with the Singapore Police and the Monetary Authority of Singapore (MAS). WB21 is registered in that country, but the MAS says WB21 is “not a WA SVF” (widely accepted store value facility) but a SVF (stored value facility) in Singapore. According to WB21, “MAS is fully aware of WB21, and WB21 reports to MAS as necessary.” Further it is confirmed that MAS has never stated that WB21 should hold a widely accepted store value facility.

Meanwhile, in desperation, Mr Bolanos contacted the police; but this has not brought his money back. He also contacted Lavanya Mahadevan, an India-based office manager at WB21. She told Bolaños that the Indian company has closed, although WB21 say they are unable to confirm these communications and that the software development arm of the Indian entity is being closed based on a strategic management decision. WB21 also said that the WB21 Group currently has 14 operational entities in 9 countries. According to WB21 “Mr Bolanos’ case is being dealt with by the Compliance Team, and the matter is under review.”