Lithuania’s central bank reportedly investigating Railsr over AML failures
UK fintech Railsr is reportedly facing an investigation by the Bank of Lithuania over alleged anti-money laundering (AML) and terrorist financing failings within its Lithuanian subsidiary.
Railsr is reportedly facing investigation in Lithuania over AML failures
The Telegraph reports that the company’s Lithuanian subsidiary PayRNet is being investigated by the country’s central bank. PayRNet secured an electronic money institution licence from the Bank of Lithuania in 2020.
In a statement, the Bank of Lithuania says: “There is reason to suspect that the institution is grossly and systematically violating the Law on the Prevention of Money Laundering and Terrorist Financing.”
The central bank has reportedly applied for a court order compelling Railsr to stop taking on new clients, warning the firm “not to establish business relationships with new clients, as well as intermediaries and persons distributing and/or redeeming electronic money of this institution”.
A Railsr spokesperson says it has already “offboarded” customers who failed to meet the required standards and the firm is in the process of appealing the Bank of Lithuania notice, “which has been issued ahead of any final review findings”.
“The reviews of our processes and intermediary activities are ‘backward looking’ and as the Bank of Lithuania has only reached an interim review, we have not yet had a chance to give a management response on the historic controls and customers they have observed,” the Railsr spokesperson adds.
Last month, it was reported that African paytech giant Flutterwave is bidding to acquire Railsr just weeks after the fintech raised $46 million in a Series C funding round at a reduced valuation of $250 million.
