The Financial Times identified UK Neobank Revolut as a “financial service provider” whose audit was “inadequate” with a “risk to an undetected material mistaken statement” as the Financial Times. Revolut, Europe’s second-most valuable fintech company on the private market, has taken steps to offer a variety of crypto services.
According to the Financial Times, UK financial regulators found flaws during the audit process of Revolut (a neobank offering crypto investment services), according to Financial Times.
In July, a Financial Reporting Council report stated that an audit performed by BDO accounting firm on an unidentified “financial service provider” was inadequate and presented a risk of “unprotected material misstatement.” According to sources familiar with the matter, this unnamed company was Revolut.
According to the FT, Europe’s second-most valuable private fintech company faces pressure to improve its internal controls. These systems ensure that financial reporting is accurate and reliable.
The FT spoke with a person who warned that a stricter approach by BDO could lead to delays in filing the company’s accounts. Most of these accounts are due at the end the month. The company is behind in filing accounts for Newco UK Ltd.. This entity was intended to house the delayed UK banking licence.
Revolut set to delay accounting files
Failure to file an accounting on time could result in the prosecution of directors of companies, as was the case with Nikolay Storonsky (founder and CEO at Revolut), according to the report.
According to a source familiar with the situation, the FT was told by a person who knew the details that the neobank needed to improve its “unsexy” aspects of its back office and controls because it “needs a backoffice like a bank and a culture like a tech company.”
This news comes after the company was hit by resignations within its risk and compliance department — including its UK heads for risk, compliance, and money laundering — and after Storonsky complained to City AM about how regulators are considering its application for a banking license.
Crypto licence is still in the pipeline
Revolut has yet to be granted a permanent license in order to provide cryptocurrency services in the UK. It was recently authorized by the Cyprus Securities and Exchange Commission for cryptocurrency services and to launch new tokens.
Storonsky stated to The Block in a May interview that it plans to launch its native token and a non-custodial digital wallet.
