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September 29, 2021

German regulator BaFin fines N26 for AML related issue

Online lender N26 has revealed that Germany’s financial regulator (BaFin) had imposed a fine of approximately $5m in June this year.

The fine was imposed for delayed reports of less than 50 suspicious activities related to anti-money laundering (AML) in 2019-2020, N26 added.

The lender said that it has already paid the fine in full and all the related proceedings have been closed.

“N26 takes its responsibility in the fight against the growing threat of global financial crime, and in the prevention of money laundering, very seriously,” the online bank clarified.

Notably, in May this year, BaFin ordered the neobank to address anti-money laundering lapses by implementing appropriate internal controls and safeguards.

Particularly, BaFin asked N26 to improve the shortcomings in IT monitoring and in customer due diligence.

In a separate development, Dragoneer Investment Group is reportedly planning to invest in the N26, Sky News reported.

The investment from the early investor in Spotify could take the German lender’s valuation to $10bn. However, it is not clear if the deal has been signed yet.

Valentin Stalf and Maximilian Tayenthal established N26 in 2013. Last May, it raised $100m, after extending its Series D round to $570m.

In July this year, N26’s rival Revolut, raised $800m at a valuation of $33bn, which made it the most valuable fintech in the UK.

Last week, American banking giant JPMorgan launched its new digital retail bank in the UK, called Chase.

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