British challenger bank Monzo is being investigated by the Financial Conduct Authority (FCA) for a potential breach of money laundering regulations.
On 7 May 2021 the British financial regulator informed Monzo that they started an investigation into its compliance with financial crime regulation, the lender said in its annual report.
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Monzo said: “This investigation is looking into both potential civil and criminal liability. We’re cooperating with the FCA’s investigation, which is at an early stage.
“The FCA are reviewing and investigating our compliance with financial crime regulation. We’re co-operating with them, but we expect it to take time to resolve.
“This could have a material negative impact on our financial position, but we won’t know when or what the outcome will be for some time.”
Concurrently, the bank has reported a pre-tax loss of £130m in the year to February, which is 13% more than the previous year.
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By GlobalDataFounded in 2015, the bank has reported a 23% rise in new customers to five million.
The company has suffered due to the Covid-19 pandemic, which forced it to slash 120 jobs in June 2020.
The layoff accounted for 8% of the company’s total workforce and mainly affected Monzo’s Head Office staff and operations teams.
Around that same time, Monzo closed a $76m funding round with a 40% drop in valuation.
Earlier this year, Monzo extended its Series G funding round by raising an additional investment of £50m ($68m).
