Lithuania’s central bank has revoked the license of UAB Finolita Unio, a local Fintech, on charges of violating anti-money-laundering and counter-terrorist financing rules. Finolita had received a license in 2019 from the Lithuanian central bank to execute “payment transactions” and issue, distribute and redeem electronic money.
As per an FT report, the Bank of Lithuania revoked Finolita Unio’s license following allegations that the Fintech was used to steal more than €100m from the German payments company Wirecard. The central bank said the amount was stolen from Wirecard before the company announced bankruptcy last year. Once a top Fintech based in Germany, Wirecard collapsed in a spectacular fashion. Long plagued by accusations of malfeasance, and denial by the firm, Wirecard imploded when accountants uncovered a small amount of missing funds totaling around €3 billion.
“Finolita had treated anti-money-laundering and counter-terrorist financing rules irresponsibly,” the central bank said.
The Finolita case is a wake-up call for the central bank to scrutinize and monitor the new-age Fintechs that mushroomed in Lithuania following the UK’s departure from the EU. Lithuania has the highest number of fintechs in the entire European market.
The Lithuanian central bank was said to have run a formal investigation in late 2020 and found out issues at Finolta soon after the German financial regulator acknowledged problems at Wirecard.
The probe found that Wirecard had granted a €100m loan in March 2020 to a subsidiary of Singapore-based Senjo Group, Finolita’s parent company. The loan was processed by Finolita and channeled to Wirecard’s COO, Jan Marsalek, who remains on the run from authorities. Philippine authorities have filed a criminal complaint against Marsalek. The money was supposedly held in trust in two Philippine lenders to cover trading risks carried out by third parties on Wirecard’s behalf, as per media reports.