The Financial Conduct Authority has shut down payments firm Euro Exchange Securities UK after the High Court approved the appointment of special administrators on Thursday over concerns about financial crime risks.

The ruling confirms the positions of Duncan Perring and James Bennett of Teneo Financial Advisory as joint special administrators, following their provisional appointment last week after EES was ordered to cease trading. The administrators are now responsible for overseeing customer claims and returning client money as quickly as possible.

EES, the London arm of an electronic money and payments business with operations in the United States and Spain, did not challenge the regulator’s action and agreed it was not in the company’s interests to seek a return to normal trading. The firm stated on its website that it could no longer trade, onboard new customers, accept new funds or permit withdrawals.

The FCA said it intervened after lengthy engagement with the company over what it described as serious concerns regarding the way EES operated its business. In a statement, the regulator said those concerns pointed to significant financial crime risks, including systemic weaknesses in the firm’s financial crime controls, safeguarding arrangements, ownership structure and governance.

According to the FCA, the administrators have already taken control of the company, secured substantial documentation and frozen funds while assessing the firm’s position. The regulator said the case marks the first use of the Payment and Electronic Money Institution Insolvency Regulations 2021 in this way.

Matthew Long, director of payments and digital assets at the FCA, said: “The risk of payment firms being used by criminals to launder cash to fund other offences is significant, which is why they must meet expected standards.”

Long added: “Fighting financial crime is at the heart of our strategy – and that means using our powers to their fullest extent to protect consumers and the integrity of the financial system.”

The FCA said EES was instructed on 4 June to stop carrying out regulated electronic money and payment services. Customer funds held by electronic money firms are not covered by the Financial Services Compensation Scheme, meaning administrators must first assess safeguarded funds before determining how money can be returned to customers.

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