Revolut faces new legal battle over ‘£600,000 fraud’

Beleaguered fintech firm Revolut has been accused of enabling £600,000 fraud, The Mail on Sunday can reveal.

Terna Energy Trading, listed on the Athens Stock Exchange, has taken legal action against the British bank over claims it violated money laundering rules by failing to stop a “fraudulent” transaction last year, court documents show.

The row will increase scrutiny over Revolut’s operations, which are under intense scrutiny as the start-up fights for a UK banking license. Founded in 2015, it is the UK’s most valuable fintech, but has been awaiting full regulatory approval for more than two years and has been hit with embarrassing setbacks.

This also applies to the departure of key officials and a warning from the accountant that overdue accounts may contain ‘material misstatements’.

A lawsuit will once again give headaches to co-founder Nik Storonsky, who recently lashed out at Bank of England officials over the licensing delay, claiming it had been a “long and tiring process.”

Terna claims criminals stole £600,000 from his account after bypassing Revolut’s systems.

Documents filed with the Supreme Court show that fraudsters tricked Terna into paying cash to a fake supplier, which was processed through Revolut in February 2022.

The payment was initially frozen by anti-money laundering software, but a Revolut analyst in Lithuania later brushed it off.

Revolut is headquartered in the UK but has 28 million customers worldwide and is licensed by the Lithuanian regulator.

Terna claims it alerted an online Revolut agent who “has taken no steps to investigate the payments or refer the matter to the relevant team”, and is seeking damages under the Proceeds of Crime Act.

In 2019, the Financial Conduct Authority investigated the bank over compliance concerns after a former employee claimed systems for flagging suspicious payments weren’t good enough.

Revolut has also lost several key people in its risk and compliance team since 2020. It was founded in London by former Credit Suisse and Lehman Brothers trader Storonsky, 38, and Vlad Yatsenko, 39.

Customers can open an account and have a debit card, but the bank cannot hold or lend deposits until it has a UK license.

The bank has yet to file its defense in the case. It said: ‘We sympathize with all victims of sophisticated authorized push payment fraud and urge everyone to remain vigilant against organized criminals attempting to steal funds.

“We take fraud seriously, but cannot comment on allegations that are the subject of legal proceedings.”