The Lithuanian subsidiary of British FinTech Railsr stands accused of “grossly and systematically violating” rules around stopping illegal payments.
The Telegraph reports that the company’s Lithuanian entity, PayRNet, has been under investigation by the country’s central bank.
A spokesperson for the Bank of Lithuania told the newspaper: “There is reason to suspect that the institution is grossly and systematically violating the law on the prevention of money laundering and terrorist financing.”
The central bank also said it has sought a court order to force PayRNet, Railsr’s European payments business, to temporarily stop taking on new clients.
The allegations come as the challenger bank seeks a buyer following a severe decline of its valuation in 2022. The company had been seeking a fundraise which would value it at $1 billion, but in October 2022 it raised funding at a cut-price valuation of $250 million.
A spokesperson for Railsr described the central bank’s investigation as “backward looking”.
They said: “The Bank of Lithuania has only reached an interim review we have not yet had a chance to give a management response on the historic controls and customers they have observed.”
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