Wise hit with $4.2 million fine by multiple US states for AML deficiencies
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The multi-state settlement involved regulatory agencies from New York, Massachusetts, Texas, California, Minnesota, and Nebraska.
Alongside the $4.2 million penalty, the watchdogs have ordered Wise to conduct a lookback for previously closed accounts, enhance its reporting procedures for suspicious activity, strengthen its due diligence procedures for AML/CFT risk, and improve its systems for data integrity regarding customer accounts.
Under the order, Wise will engage an independent third party to verify corrective actions to the systems have been performed and, for two years, submit quarterly written progress reports to the multistate regulators.
'Through collaboration with our valued state partners we will continue to ensure that money transmitters adhere to rigorous standards to protect consumers and the integrity of the financial system,' says NYDFS superintendentAdrienne Harris. 'Strong relationships with state and federal regulators alike is crucial to ensuring a fair, transparent, and resilient financial system that protects consumers and fosters innovation across the country.'
It's not the first time that Wise has been in hot water with US regulatory bodies. In January, the firm received a $2.025 million penalty from the Consumer Financial Protection Bureau (CFPB) for misleading customers about fees and charges.
The firm has also fallen foul of money laundering rules in other jurisdictions: In 2022 it was hit with a $360,000 fine by Abud Dhabi's financial regulator for failing to "establish and maintain adequate AML systems and controls to ensure full compliance with its AML obligations".
Wise has also been ordered to undertake a remediation programme in Europe after investigations by the National Bank of Belgium concluded that the fintech did not have proof of address for hundreds of thousands of customers
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