A “glitch” in the system led to the passage of thousands …
A “glitch” in the system led to the passage of thousands of potentially illegal transactions through the Revolut crypto bank
UK-based digital bank Revolut committed a violation of basic banking rules that resulted in thousands of potentially suspicious transactions going through its platform. The Telegraph writes about this with reference to the documents that came into the possession of the publication..
According to the submitted documents, last year Revolut shut down an automated system for 3 months aimed at preventing questionable money transfers. As a result, thousands of illegal transactions could have gone through the startup’s digital banking system between July and September 2018..
Revolut initiated an internal investigation in the second half of 2018 after being notified of the issue by a whistleblower. “The investigation found that the decision to disable the transaction delay mechanism was wrong and led to the failure of the relevant systems,” wrote Revolut chief attorney Tom Hambrett in a letter to the UK Financial Conduct Authority (FCA).
The mentioned system automatically verifies customer data with the official list of “politically exposed persons” and persons with whom the increased risks of illegal transactions are associated.
Revolut approached the FCA in September to notify the regulator of the three-month “outage”. In a statement, the startup explained that it shut down the system after it allowed 8,000 “false positives”, mistaking legitimate transactions as suspicious and blocking them. As a result, the company switched to a system that could flag suspicious transactions, but did not automatically reject them. The full system was resumed on September 16.
Revolut, in a letter to the regulator, also stated that it does not believe that in the process of switching to an alternative system on its part, there were any violations of the law. “As far as we know, there were no violations of the law in the context of the sanctions measures,” he wrote..
Cryptocurrency users know Revolut as a service that allows them to buy and sell bitcoins, Litecoin, Ethereum, Bitcoin Cash and XRP for fiat in the interface of their application, as well as receive cashback, including in digital currencies, when paying for purchases with a Revolut Metal card. Revolut obtained a banking license from the European Central Bank in December 2018.
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