5 ms·

Revolut is at risk of losing its European banking licenses

78 points by MordodeMaru 7y ago

atlasunshrugged 7y ago
The sins of the father? I wonder if there's more going on behind the scenes than meets the eye here. It seems very strange to me that Lithuania, who has put a massive amount of effort into becoming a friendly location for fintechs would risk alienating such a big company on such a flimsy pretext as the founder being Russian with a Russian father at Gazprom (I'm ignoring the server piece because I don't know what to make of that - Russia is a big market and if they wanted to expand I believe they need to have servers locally and it may be a cost cutting move). edit to add sources for context: https://sifted.eu/articles/emoney-authorisation-lithuania/ https://sifted.eu/articles/emoney-authorisation-lithuania/ - article describing Lithuania's push to become a fintech capital https://investlithuania.com/key-sectors/technology/fintech/ https://investlithuania.com/key-sectors/technology/fintech/ - Government website describing the process and their 'forward thinking' regulation https://www.engadget.com/2019/02/05/apple-russian-user-data-local-servers/ https://www.engadget.com/2019/02/05/apple-russian-user-data-... - article about Apple's storing of some user data on servers in Russia to comply with the local data law
- oytis 7y ago
  It's totally wrong to revoke the banking license simply because the founder's father is a bad boy. But it's a good reason to start the investigation. Probably that should even have been started before the license was given, not just now. Revolut is also funded by another Russian oligarch, Juri Milner - too many coincidences to me, and definitely worth digging deeper.
  - rchaud 7y ago
    Gazprom logos are common on stadium billboards and team jerseys in a number of European football leagues, so that alone probably doesn't raise suspicion. It's probably the fact that this is a firm handling a lot of other people's money, in an industry that's tightly regulated to reduce fraud, money laundering etc.
- ksajadi 7y ago
  Is it only about the father? They moved (or announced) their servers to Russia and have been known to abuse personal data (at least in the UK) of their customers. Now all of those might be coincidence...
- wfn 7y ago
  > I wonder if there's more going on behind the scenes than meets the eye here. There are additional risks for Lithuania with regards to Revolut which are not often discussed (but they have been raised by the parties concerned, and others, etc.) Consider: Revolut is now (with its new banking license) able to take in customer deposits. They are (by law) insured by the state (up to a certain sum). If the bank goes bust, the state-owned insurer is on the hook. Now consider Revolut's pan-European expansion plans (flaunting and expecting continued aggressive growth). There is a lot of exposure here; through a pretty dodgy company no less. So there really is a lot to consider here. Bank of Lithuania (a regulatory body) inviting Revolut themselves also doesn't look too good. Hence parliamentary oversight steps in, with legitimate concern on hand. Bear in mind that core intention is not always seeped in some kind of behind-the-scenes malice, or pure populism, or what have you. I personally see fintech as a field with some interesting companies and potential for innovation, but also as a possible catalyst / accelerator of the next tech-related bubble bust. One should invest into the field with care and cautiousness.
  - vincnetas 7y ago
    Only deposits are insured. Having account on Revolut does not count as a deposit. So until Revolut starts offering such option there is no risk. And not sure if current license permits accepting deposits.
    - wfn 7y ago
      Yes, of course; but deposits will come, Revolut communicated as much (IIRC). Also (IIRC) the license does permit accepting deposits, but as of now there are limits / quantity constraints imposed. So there is that. But those limits can be raised (and intuition (not knowledge) tells me it may not be hard; but this also stems from my distrust of BoL and its regulatory oversight capacity).
deleted 7y ago
[deleted]
robotmay 7y ago
> The Lithuanian government has accused Revolut of having Kremlin ties before, which reached boiling point when it was reported that the company would be moving all of its servers to Russia. That I did not know. I was an early user of Revolut but I've been done with them for a while (their marketing team is responsible for me dropping it). Time for me to send them a GDPR removal request I guess. They don't provide any way of deleting your account other than going through their awful chat support system so I guess I'll have to suffer through that again.
- karl_schlagenfu 7y ago
  I have the same problem and didn't use it because of their scummy marketing practices. I uninstalled the app thinking I could just log in to the website to cancel it but no luck, you have to phone. Is there a simple way to submit GDPR deletion requests like this? They're being deliberately obtuse with closing accounts. They deserve to lose their licences.
  - MordodeMaru 7y ago
    And on top of that there's their culture: https://www.wired.co.uk/article/revolut-trade-unions-labour-fintech-politics-storonsky https://www.wired.co.uk/article/revolut-trade-unions-labour-...
  - dazc 7y ago
    My account was deleted without any intervention from myself. I assumed it was because I had not used the account for some time and the balance was < 1 euro? Like others have mentioned, I found their customer service to be worse than useless but kept the account as a stand-by. Obviously, since I no longer have an account, the options for submitting a GDPR deletion are somewhat limited.
  - jon-wood 7y ago
    A GDPR request may not go far because banking regulations supersede GDPR when it comes to retaining records that might be required for financial investigations. I believe in a UK there's a requirement that they hold onto details of any transactions done for at least eight years.
sschueller 7y ago
They should loose their license for their business practices [1] irregardless if they have ties to the Kremlin. [1] https://www.finextra.com/newsarticle/33454/tales-from-the-dark-side-of-the-revolut-revolution-cfo-resigns https://www.finextra.com/newsarticle/33454/tales-from-the-da...
roryrjb 7y ago
All I care about is that my funds are safe. I currently have a lot in Revolut, I've had nothing but positive experiences with them but moving to another bank is not a big deal for me.
- HarryHirsch 7y ago
  Without looking too far into it, it has potential to be a re-run of the Landsbanki/Kaupting affair.
- megous 7y ago
  Do they actually operate as a bank yet? Just having licenses doesn't mean they use them. If not, it's just another Paypal, they can lock you out anytime they want, and the "due process" to resolving it is their chat and their rules.
- snodnipper 7y ago
  Agreed. I've had nothing but positive experiences with Revolut. Their app is excellent and I have been using it almost exclusively for the past 6 months. I have never had an issue contacting customer support (I do pay)...and it makes me smile how I can have crypto alongside fiat currency. I would say about 20% of my contact list also use Revolut and I have only heard positive experiences from them.
  - karl_schlagenfu 7y ago
    How much are Revolut paying you for that post? It almost sounds like one of their dodgy marketing practices.
- wil421 7y ago
  If they aren’t part of the legitimate banking system then likely your funds are not safe. In the US you are automatically insured by the FDIC for up to $250k per bank and per account type (like savings and checking). Does the EU have a similar concept? If so, will you lose insurance if their license is revoked?
ddon 7y ago
May be not related to the headline, but Revolut is locking many accounts without any reasons and not much can be done... Would be nice to know where to send a complaint about them in Lithuania, any ideas?
tasubotadas 7y ago
Let me explain what's actually happening. Some context first. Lithuania's Central Bank (Lietuvos Bankas) is currently led by a rather modern team which created a process that allows fintech companies to acquire "money institution" or bank licence in a sandboxed environment. That means that companies can only do non-risky business (like transfers) with a special oversight. LB was/is quite vocal about their interest in attracting companies from the UK in a post-brexit Europe as a banking licence in Lithuania is valid in the whole EU. The person that leads the central bank is Vitas Vasiliauskas and he is strongly supported by the current president. Quite a few companies have shown interest in this fast-tracked process (even Google opened their branch). Revolut was one of them, as it is really popular in Lithuania. I believe, that Lithuania is the third country by the number of Revolut users (a year ago 3% of the population were using Revolut). The commission (The Commission of Budget and Finance) that's responsible for the investigation is lead by Stasys Jakeliūnas. He is a member of the current ruling pro-peasant party. The commission itself is a part of the parliament. One of the other things that the commission is also currently investigating is the way the government has handled the crisis of 2008 and the role that the banks have played when interested rates were being adjusted. The government was led at that time by the current opposition. The meat of the story. Next month there is going to happen the elections for the parliament of the EU, and a few weeks after a presidential election. In 2020 MP elections are going to happen. The current consensus is that whatever Mr Jakeliunas is doing is for the sake of the elections. Their (LŽVS - peasant) party electorate is rather uneducated and hates banks (banks=evil) in general so doing something against the banks is supposed to score points. Since the current president supports the candidate that's not supported by LŽVS, going against LCB and Vasiliauskas is supposed to score some points for their candidate (or rather something against the other leading candidate). Also, they intend to score some points against the current opposition party which is leading the polls due to the supposed connection in mishandling the banks and the crisis itself in 2018. Finally, since Revolut is backed by the investors (DSI Global) that are originally from Russia and one of the Revolut's founders is Russian that's another batch of free points because Lithuanian public hates Russia due to rather well-known reasons. So just you know, LCB and VSD (Valstybės Saugumo Departamentas - CIA equivalent in LT) has done a thorough background check on Revolut and found no national security risks. I hope this paints a much clearer picture and I didn't miss anything important. TLDR; Jakeliunas is playing his part for the election and in the process of doing that he is doing irreparable damage to the global image of Lithuania.

78 points by MordodeMaru 7y ago

The sins of the father? I wonder if there's more going on behind the scenes than meets the eye here. It seems very strange to me that Lithuania, who has put a massive amount of effort into becoming a friendly location for fintechs would risk alienating such a big company on such a flimsy pretext as the founder being Russian with a Russian father at Gazprom (I'm ignoring the server piece because I don't know what to make of that - Russia is a big market and if they wanted to expand I believe they need to have servers locally and it may be a cost cutting move). edit to add sources for context: https://sifted.eu/articles/emoney-authorisation-lithuania/ https://sifted.eu/articles/emoney-authorisation-lithuania/ - article describing Lithuania's push to become a fintech capital https://investlithuania.com/key-sectors/technology/fintech/ https://investlithuania.com/key-sectors/technology/fintech/ - Government website describing the process and their 'forward thinking' regulation https://www.engadget.com/2019/02/05/apple-russian-user-data-local-servers/ https://www.engadget.com/2019/02/05/apple-russian-user-data-... - article about Apple's storing of some user data on servers in Russia to comply with the local data law

oytis 7y ago
It's totally wrong to revoke the banking license simply because the founder's father is a bad boy. But it's a good reason to start the investigation. Probably that should even have been started before the license was given, not just now. Revolut is also funded by another Russian oligarch, Juri Milner - too many coincidences to me, and definitely worth digging deeper.
- rchaud 7y ago
  Gazprom logos are common on stadium billboards and team jerseys in a number of European football leagues, so that alone probably doesn't raise suspicion. It's probably the fact that this is a firm handling a lot of other people's money, in an industry that's tightly regulated to reduce fraud, money laundering etc.
ksajadi 7y ago
Is it only about the father? They moved (or announced) their servers to Russia and have been known to abuse personal data (at least in the UK) of their customers. Now all of those might be coincidence...
wfn 7y ago
> I wonder if there's more going on behind the scenes than meets the eye here. There are additional risks for Lithuania with regards to Revolut which are not often discussed (but they have been raised by the parties concerned, and others, etc.) Consider: Revolut is now (with its new banking license) able to take in customer deposits. They are (by law) insured by the state (up to a certain sum). If the bank goes bust, the state-owned insurer is on the hook. Now consider Revolut's pan-European expansion plans (flaunting and expecting continued aggressive growth). There is a lot of exposure here; through a pretty dodgy company no less. So there really is a lot to consider here. Bank of Lithuania (a regulatory body) inviting Revolut themselves also doesn't look too good. Hence parliamentary oversight steps in, with legitimate concern on hand. Bear in mind that core intention is not always seeped in some kind of behind-the-scenes malice, or pure populism, or what have you. I personally see fintech as a field with some interesting companies and potential for innovation, but also as a possible catalyst / accelerator of the next tech-related bubble bust. One should invest into the field with care and cautiousness.
- vincnetas 7y ago
  Only deposits are insured. Having account on Revolut does not count as a deposit. So until Revolut starts offering such option there is no risk. And not sure if current license permits accepting deposits.
  - wfn 7y ago
    Yes, of course; but deposits will come, Revolut communicated as much (IIRC). Also (IIRC) the license does permit accepting deposits, but as of now there are limits / quantity constraints imposed. So there is that. But those limits can be raised (and intuition (not knowledge) tells me it may not be hard; but this also stems from my distrust of BoL and its regulatory oversight capacity).

deleted 7y ago

[deleted]

robotmay 7y ago

> The Lithuanian government has accused Revolut of having Kremlin ties before, which reached boiling point when it was reported that the company would be moving all of its servers to Russia. That I did not know. I was an early user of Revolut but I've been done with them for a while (their marketing team is responsible for me dropping it). Time for me to send them a GDPR removal request I guess. They don't provide any way of deleting your account other than going through their awful chat support system so I guess I'll have to suffer through that again.

karl_schlagenfu 7y ago
I have the same problem and didn't use it because of their scummy marketing practices. I uninstalled the app thinking I could just log in to the website to cancel it but no luck, you have to phone. Is there a simple way to submit GDPR deletion requests like this? They're being deliberately obtuse with closing accounts. They deserve to lose their licences.
- MordodeMaru 7y ago
  And on top of that there's their culture: https://www.wired.co.uk/article/revolut-trade-unions-labour-fintech-politics-storonsky https://www.wired.co.uk/article/revolut-trade-unions-labour-...
- dazc 7y ago
  My account was deleted without any intervention from myself. I assumed it was because I had not used the account for some time and the balance was < 1 euro? Like others have mentioned, I found their customer service to be worse than useless but kept the account as a stand-by. Obviously, since I no longer have an account, the options for submitting a GDPR deletion are somewhat limited.
- jon-wood 7y ago
  A GDPR request may not go far because banking regulations supersede GDPR when it comes to retaining records that might be required for financial investigations. I believe in a UK there's a requirement that they hold onto details of any transactions done for at least eight years.

sschueller 7y ago

They should loose their license for their business practices [1] irregardless if they have ties to the Kremlin. [1] https://www.finextra.com/newsarticle/33454/tales-from-the-dark-side-of-the-revolut-revolution-cfo-resigns https://www.finextra.com/newsarticle/33454/tales-from-the-da...

roryrjb 7y ago

All I care about is that my funds are safe. I currently have a lot in Revolut, I've had nothing but positive experiences with them but moving to another bank is not a big deal for me.

HarryHirsch 7y ago
Without looking too far into it, it has potential to be a re-run of the Landsbanki/Kaupting affair.
megous 7y ago
Do they actually operate as a bank yet? Just having licenses doesn't mean they use them. If not, it's just another Paypal, they can lock you out anytime they want, and the "due process" to resolving it is their chat and their rules.
snodnipper 7y ago
Agreed. I've had nothing but positive experiences with Revolut. Their app is excellent and I have been using it almost exclusively for the past 6 months. I have never had an issue contacting customer support (I do pay)...and it makes me smile how I can have crypto alongside fiat currency. I would say about 20% of my contact list also use Revolut and I have only heard positive experiences from them.
- karl_schlagenfu 7y ago
  How much are Revolut paying you for that post? It almost sounds like one of their dodgy marketing practices.
wil421 7y ago
If they aren’t part of the legitimate banking system then likely your funds are not safe. In the US you are automatically insured by the FDIC for up to $250k per bank and per account type (like savings and checking). Does the EU have a similar concept? If so, will you lose insurance if their license is revoked?

ddon 7y ago

May be not related to the headline, but Revolut is locking many accounts without any reasons and not much can be done... Would be nice to know where to send a complaint about them in Lithuania, any ideas?

tasubotadas 7y ago

Let me explain what's actually happening. Some context first. Lithuania's Central Bank (Lietuvos Bankas) is currently led by a rather modern team which created a process that allows fintech companies to acquire "money institution" or bank licence in a sandboxed environment. That means that companies can only do non-risky business (like transfers) with a special oversight. LB was/is quite vocal about their interest in attracting companies from the UK in a post-brexit Europe as a banking licence in Lithuania is valid in the whole EU. The person that leads the central bank is Vitas Vasiliauskas and he is strongly supported by the current president. Quite a few companies have shown interest in this fast-tracked process (even Google opened their branch). Revolut was one of them, as it is really popular in Lithuania. I believe, that Lithuania is the third country by the number of Revolut users (a year ago 3% of the population were using Revolut). The commission (The Commission of Budget and Finance) that's responsible for the investigation is lead by Stasys Jakeliūnas. He is a member of the current ruling pro-peasant party. The commission itself is a part of the parliament. One of the other things that the commission is also currently investigating is the way the government has handled the crisis of 2008 and the role that the banks have played when interested rates were being adjusted. The government was led at that time by the current opposition. The meat of the story. Next month there is going to happen the elections for the parliament of the EU, and a few weeks after a presidential election. In 2020 MP elections are going to happen. The current consensus is that whatever Mr Jakeliunas is doing is for the sake of the elections. Their (LŽVS - peasant) party electorate is rather uneducated and hates banks (banks=evil) in general so doing something against the banks is supposed to score points. Since the current president supports the candidate that's not supported by LŽVS, going against LCB and Vasiliauskas is supposed to score some points for their candidate (or rather something against the other leading candidate). Also, they intend to score some points against the current opposition party which is leading the polls due to the supposed connection in mishandling the banks and the crisis itself in 2018. Finally, since Revolut is backed by the investors (DSI Global) that are originally from Russia and one of the Revolut's founders is Russian that's another batch of free points because Lithuanian public hates Russia due to rather well-known reasons. So just you know, LCB and VSD (Valstybės Saugumo Departamentas - CIA equivalent in LT) has done a thorough background check on Revolut and found no national security risks. I hope this paints a much clearer picture and I didn't miss anything important. TLDR; Jakeliunas is playing his part for the election and in the process of doing that he is doing irreparable damage to the global image of Lithuania.