UK ePayments shutdown due to FCA AML concerns
London-based digital payments company ePayments Systems Ltd. has announced that it is shutting down after years of scrutiny by the Financial Conduct Authority (FCA).
In an accompanying blog post, the company cited a halt to the FCA’s regulatory crackdown dating back more than two years as the reason for its closure.
“In practical terms, this means we will not be back to full operations and we are now completely focused on refunding customers and going through the process of closing your accounts as we go out of business. Your funds remain in secure accounts with us,” the company wrote.
ePayments invited its clients with funds in their digital wallets to withdraw. Those who do not currently have a refund option are required to provide the necessary information.
Before 2020, ePayments was one of the largest digital payment processors in the UK, boasting over a million active accounts. Just two years earlier, in 2018, the FCA had granted the company an Electronic Money Institution (EMI) license, opening up the $2.7 trillion UK economy to the firm. He was popular with digital asset fans for his “crypto-to-fiat” conversions.
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However, in early 2020, the FCA reversed itself, labelling the company as having “weak financial controls”.
“We have worked hard during this period to ensure they are up to the required standard, but in these extremely challenging and unprecedented global economic conditions, and with the business constrained for so long, we can no longer sustain the business building back to that, what is required by the FCA, and to the “business as usual” status, ePayments says in its latest announcement.
The FCA stood by its decision and reiterated that all financial firms in the UK must comply with the country’s rules.
ePayments has decided to close the business. All customers are requested to take their funds as soon as possible. Learn more https://t.co/f8sNpPH61S
— ePayments (@myepayments) September 12, 2022
“Firms need to make sure they comply with our regulatory requirements, such as effective financial crime controls and protecting customer funds even when they are liquidated. During this process, we continue to monitor firms to ensure they meet our regulatory expectations,” commented Kai Linscer, spokesperson for the regulator.
The FCA has been tough on EMI as the sector has exploded in recent years. Data shows EMIs process around $1.6 billion a day. Despite this growing importance, they are still only lightly regulated.
FCA is as demanding on larger EMIs as it is on ePayments. Last year, it was embroiled in a dispute with Revolut, a $33 billion fintech startup, over the watchdog’s reluctance to grant the startup a banking license. The dispute came to a head recently when Revolut founder Nikolay Storonsky publicly called out the FCA for lagging behind its international peers.
Revolut is also still awaiting FCA approval to fully offer digital asset services in the UK.
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