Revolut has reportedly lost millions of dollars to criminals taking advantage of a flaw in its payment systems.
A report by the Financial Times said that the digital bank saw $23 million stolen from its funds across several months in 2022.
According to sources with knowledge of the matter, the issue arose because of variations between the FinTech’s US and European payment systems. The differences meant that for some declined transactions the bank was accidently refunding accounts and giving users its own funds.
The issue first took place towards the end of 2021, with organised criminals then beginning to take advantage of the flaw towards the end of last year, said the sources.
They revealed that while Revolut got back some of the money after pursuing several people involved in the theft, overall the bank lost roughly $20 million.
The newspaper said that Revolut was unaware of the problem until a partner bank based in the US flagged that it was storing less money than expected.
Revolut declined to comment on the reports.
The loss will likely be a significant blow for the company, with the funds stolen amounting to close to two-thirds of its yearly profit in 2021.
The company also recently saw its valuation cut by 40 per cent.
Having made an investment of around £7 million in 2018, the latest financials of venture capitalist Molten Ventures reflects a valuation cut of around 40 per cent -- dropping from £91.3 million at the same financial period in 2022 to £54.5 million in the year ended 31 March 2023.
The move followed Schroders Capital Global Innovation Trust cutting its valuation of Revolut by around 46 per cent in April.
Earlier this year Revolut said that the delayed acquisition of its UK banking licence was due to recent turmoil in the global financial ecosystem.
Revolut secured an EU banking licence through Lithuania in 2018 and a full banking licence from the European Central Bank in 2021 but has still not received its UK banking licence, having filed an application with the Financial Conduct Authority in January 2021.
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