Revolut has withdrawn its application for an e-money licence in Luxembourg that it first lodged in September 2018, according to The Telegraph.
The news outlet notes that Revolut stopped its Luxembourg application after questions about its compliance systems were raised in the Chamber of Deputies by the MP Laurent Mosar (CSV) in April, which Revolut has refuted.
A spokesman for the digital banking start-up said the decision was made after it was granted two licences by the Lithuanian financial regulator in December that allow it to passport its service across the EU.
Without citing any company names, Mosar stated in a parliamentary question to the finance minister, Pierre Gramegna (DP), that: “Fintech companies are subject to a host of national and international rules. However, it would seem that these rules are not always respected by fintech companies, so that some of them get their approval, even though they do not meet financial and banking regulatory requirements. According to my information, at least one major company that has recently applied for approval, would be flagged in its country of origin for non-compliance with existing regulations as well as for non-transparency.”
Mosar asked Gramegna what the finance ministry was doing to ensure compliance with fintech rules. Gramegna responded that the Financial Sector Supervisory Commission (CSSF) and not the finance ministry oversaw regulating financial institutions.
The Telegraph reported that the CSSF began conducting spot checks on financial technology firms headquartered in the country earlier this year to verify that board and staff members were truly located in the grand duchy.
The neobank needs regulatory approval from one of the EU27 in order to maintain its access to the single European market after Brexit.
Revolut told news outlets that it did not withdrawal its application due to questions about its compliance technology. Rather it took a “strategic decision” to focus on its licence application in Ireland. A spokesman said the firm “had a very positive and open dialogue” with the CSSF, as well as the promotion body Luxembourg for Finance.
Revolut is one of the UK’s leading digital banking start-ups and this week announced it had reached 7m customers. The firm was previously valued at $1.7bn (£1.3bn) but has faced questions over its allegedly tough work culture.
Chief executive Nikolay Storonsky said in March that his business has made „mistakes” but pledged to improve Revolut’s work culture.
„For more than a week now, ScoreRise enrolls daily hundreds of users through an innovative facial recognition interface. Enrollment takes less than a minute and it does not require presence of a human operator or video recording. And, of course, it stays fully GDPR compliant with help from Reff & Associates and Deloitte Romania.”