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Revolut's CFO recently 'resigned' from the company in light of claims that Revolut switched off an anti-money laundering system that flags suspect transactions.

by Peroni 7y ago

Revolut's CFO recently 'resigned' from the company in light of claims that Revolut switched off an anti-money laundering system that flags suspect transactions. Revolut cited 'personal and health reasons' for the CFO's resignation. Whatever those personal and health reasons really were, they clearly passed quite quickly as within the space of a few weeks, said CFO has joined another FinTech company as their new CFO. The company quite literally has the words "get sh*t done" in giant neon letters on their office wall. They live by the mantra of move fast and break things. That mantra is inevitably going to cause problems when your entire business is dealing with real money owned by real people in one of the most heavily regulated industries in the world.

C1sc0cat 7y ago
Maybe there was an argument and the CFO was against turning off the money laundering and lost out and left over that.
- krn 7y ago
  The CFO resigned only after the documents passed to The Telegraph by a whistleblower showed that for three months in 2018 Revolut switched off an automated system designed to stop dubious money transfers[1]. [1] https://www.telegraph.co.uk/technology/2019/02/28/revolut-failed-block-suspicious-transactions/ https://www.telegraph.co.uk/technology/2019/02/28/revolut-fa...
  - C1sc0cat 7y ago
    I saw that but it wasn't clear as far as I remember who did this - it may be the CFO took responsibility for some one else's actions.
    - JumpCrisscross 7y ago
      > it may be the CFO took responsibility for some one else's actions CFOs of financial services companies are typically senior AML officers. All AML actions are their actions, and AML liability for AML officers is almost strict liability. If something happens and if best practice wasn’t followed, the AML officer(s) are personally and criminally liable. If someone could turn off the entire AML scanning system with the CFO’s prior knowledge, sign-off, and ex post facto notification, that’s a deficient AML policy.
      - knd775 7y ago
        I'm not saying this is definitely the case, but it could be why he left. Could you imagine if you were criminally liable for something like this, and found out that the monitoring for it was disabled without your knowledge? I'd want to get out of there ASAP.
      - londons_explore 7y ago
        It wasn't the entire system. It was some of the rules. They were rules which weren't very accurate, were leading to lots of unhappy real customers, and not catching many fraudsters. For example, the rules stopped large numbers of women who had bank accounts or their passports in maiden names from transferring money to themselves. Revolut would see an incoming payment from supposedly the same person, but with a different name, and lock the whole account down until documents could be provided proving why that happened. That means if you top up your Revolut account on saturday to buy some McDonalds, you are now going to be locked out of all financial services for probably 1+ week while you get official documents proving the name change. A marriage certificate isn't enough. If your salary is paid into Revolut, you might default on loan payments, loose your house/car, etc. All that to stop only the stupidest of money launderers. Smart money launderers know to use business accounts where the name of the account holder isn't checked by any bank.
        deleted 7y ago
        [deleted]
        uxcolumbo 7y ago
        > Smart money launderers know to use business accounts where the name of the account holder isn't checked by any bank. I don't quite follow - can you elaborate and explain the scenario?
        mschuster91 7y ago
        In Germany at least, when you order a transaction you have to specify recipient account holder name and IBAN. Recipient bank checks if the name on the IBAN matches with the one in their records (after normalization to reduce error rates e.g. from umlauts) and if there's an obvious mismatch reject the transaction. Business accounts however are not checked as tightly as people often enough either outright mis-spell the company name, use outdated company names, specify departments in the name and not the comment field, ...
  - codedokode 7y ago
    Maybe that system was low quality and blocked valid transactions?
    - dyadic 7y ago
      Maybe it was, but that's not a good excuse. "We wrote some software to prevent money laundering but it was crap so we turned it off"
      - SpicyLemonZest 7y ago
        That seems like an entirely reasonable response in isolation. Sometimes you write new software and find it just doesn't work in production. Were they not doing anything else to prevent money laundering?
      - orf 7y ago
        > We attempted to write some software to prevent money laundering but it didn't work. So we turned it off. What are you talking about, that's completely reasonable.
      - bigiain 7y ago
        Or "We wrote some software to prevent money laundering but it worked properly and blocked heaps of profitable transactions, so we turned it off"
glogla 7y ago
Also Revolut CEO's father is CEO of Gazprom (or some division, I'm not sure I understand their structure). And it got it's money from DST Global incubator, which has Kremlin ties. Meaning, despite their London HQ, Revolut is Russian owned and Russian managed pseudo-bank. Giving them more money might not be great idea.
- Peroni 7y ago
  Considering both senior politicians in Lithuania and Luxembourg have raised formal concerns about Revolut's bid for a bank licence, specifically because of the CEO's alleged Kremlin ties, I'm willing to assume there's some substance to that concern.
  - glogla 7y ago
    Them not having the license also means that the deposits aren't insured the way they normally are in EU, meaning you get nothing if things go wrong. We use Revolut around the office to split bills for lunches, etc, but I wouldn't keep more than few bucks in there.
    - tshanmu 7y ago
      edit: They have a banking license but current account customers now still get an e-money account only - quite confusing state. With an e-money account, the client money is supposed to be in a separate account and if they go under, you still get your money. (FCA regulates all this) They have a banking license from Lithuania (but customers are not switched to it) which might be revoked by Lithuania and they are trying for another license in Ireland. Thanks to comment below - edited this make more sense.
      - krn 7y ago
        Revolut received its banking license from Lithuania in December 2018, but hasn't switched its customers over yet. After the family connection with Gazprom became public, Lithuania started considering revoking the license, and Revolut applied for another one in Ireland. It's not clear now, when and which banking license Revolut will start using. It's worth pointing out, though, that Revolut already has more customers than there are tax payers in Lithuania[1]. [1] https://www.theguardian.com/money/2018/dec/22/lithuania-iceland-banking-revolut https://www.theguardian.com/money/2018/dec/22/lithuania-icel...
dgellow 7y ago
> The company quite literally has the words "get sh*t done" in giant neon letters on their office wall. That has become one of my red flag. I want to deal with people and companies focused on the quality of their products and businesses, not on doing "shit" (taking their motto literally).
- wastedhours 7y ago
  And after reading about their work culture, I also don't tend to trust companies that grind their employees down and spit them out. Banking is high pressure at the best of times, but reading about how they work doesn't fill me with confidence in their quality.
- PhasmaFelis 7y ago
  Absolutely. "Move fast and break things" is barely acceptable for services where failure is mostly just annoying, like social media. If your product is banking, medicine, transport, or anything else that can seriously harm people, "move fast and break things" amounts to criminal negligence.
  - xenocratus 7y ago
    Amen. Another example of a field that I'm personally aware of and in which this kind of attitude should not be acceptable is cybersecurity. If your job is to protect people, then EVERYTHING you release has to be bulletproof.
    - unethical_ban 7y ago
      As someone in cybersecurity, I would offer an alternate perspective: That sometimes you have to lock things down despite not being absolutely certain of side effects, being willing to take some outages, if you ever expect to get something done. Analysis Paralysis is a real thing. Sometimes you just have to do it.
      - soverance 7y ago
catacombs 7y ago
> Revolut cited 'personal and health reasons' for the CFO's resignation. Whatever those personal and health reasons really were, they clearly passed quite quickly as within the space of a few weeks, said CFO has joined another FinTech company as their new CFO. Just waited for the golden parachute check to be cashed in.
dubliner2077 7y ago
And use candidates to your job offers so they do free marketing campaigns for you. Basically. To be honest, fuck Revolut, so use them with little money. Something is not right with these freaks.
- rurp 7y ago
  > And use candidates to your job offers so they do free marketing campaigns for you. Can you expand on this? I'm not sure what the reference is to.
  - Peroni 7y ago
    https://www.wired.co.uk/article/revolut-trade-unions-labour-fintech-politics-storonsky https://www.wired.co.uk/article/revolut-trade-unions-labour-...
jacquesm 7y ago
> personal and health reasons That could easily be a way to say that he got threatened to leave that anti-money laundering system switched off 'or else'. Keep in mind that as soon as you create a way for organized crime to do their thing on your service and you are making money of them that they will happily consider you to be in their debt. It happens in the movies, and sometimes it happens in real life. Someone I know peripherally had something like that happen to him because of a series of movie theaters. Not good, even if you are not aware that such things are happening. This is why casinos, online gambling, bitcoin related stuff and payment systems as well as two-sided market places always require extra care, before you know it you have a bunch of criminal coat tail riders on board.
anthonybsd 7y ago
>Revolut's CFO recently 'resigned' from the company in light of claims that Revolut switched off an anti-money laundering system that flags suspect transactions. Revolut's CEO[1] is the son of the top bureaucrat of Russian Gazprom, which has been implicated as the main channel of - you guessed it[2], money laundering for Russian oligarchs [3]. [1] https://en.wikipedia.org/wiki/Nikolay_Storonsky https://en.wikipedia.org/wiki/Nikolay_Storonsky [2] https://panamapapers.sueddeutsche.de/articles/56fec05fa1bb8d3c3495adf8/ https://panamapapers.sueddeutsche.de/articles/56fec05fa1bb8d... [3] https://www.ft.com/content/2ebff9ee-38f6-11e9-b856-5404d3811663 https://www.ft.com/content/2ebff9ee-38f6-11e9-b856-5404d3811...
- shitgoose 7y ago
  [3] is paywalled. and there is no connection between [1] and [2] (i think putin's friends would crack up laughing at the prospect of laundering billions through a british startup). but the premise is correct - a unicorn who raised 5m for an online bank startup is hardly a serious option.
- p1anecrazy 7y ago
  As a Russian, I would like to point out that both degrees he has got (Moscow Institute of Physics and Technology and New Economic School) are from top-tier institutions. Money can't buy them and in general they are not attractive for rich kids. Also, Gazprom Promgaz != Gazprom. It's "a research institute for Gazprom" [1]. [1] https://en.wikipedia.org/wiki/Gazprom_Promgaz https://en.wikipedia.org/wiki/Gazprom_Promgaz
  - booblik 7y ago
    Money can definitely buy them
    - omnimus 7y ago
      I would not be so sure abou that. But money can for sure buy you people who make your thesis.
  - 7y ago
bezoisevil 7y ago
Ahhh move fast and break things, good ol agile.

by Peroni 7y ago

C1sc0cat 7y ago

Maybe there was an argument and the CFO was against turning off the money laundering and lost out and left over that.

krn 7y ago
The CFO resigned only after the documents passed to The Telegraph by a whistleblower showed that for three months in 2018 Revolut switched off an automated system designed to stop dubious money transfers[1]. [1] https://www.telegraph.co.uk/technology/2019/02/28/revolut-failed-block-suspicious-transactions/ https://www.telegraph.co.uk/technology/2019/02/28/revolut-fa...
- C1sc0cat 7y ago
  I saw that but it wasn't clear as far as I remember who did this - it may be the CFO took responsibility for some one else's actions.
  - JumpCrisscross 7y ago
    > it may be the CFO took responsibility for some one else's actions CFOs of financial services companies are typically senior AML officers. All AML actions are their actions, and AML liability for AML officers is almost strict liability. If something happens and if best practice wasn’t followed, the AML officer(s) are personally and criminally liable. If someone could turn off the entire AML scanning system with the CFO’s prior knowledge, sign-off, and ex post facto notification, that’s a deficient AML policy.
    - knd775 7y ago
      I'm not saying this is definitely the case, but it could be why he left. Could you imagine if you were criminally liable for something like this, and found out that the monitoring for it was disabled without your knowledge? I'd want to get out of there ASAP.
    - londons_explore 7y ago
      It wasn't the entire system. It was some of the rules. They were rules which weren't very accurate, were leading to lots of unhappy real customers, and not catching many fraudsters. For example, the rules stopped large numbers of women who had bank accounts or their passports in maiden names from transferring money to themselves. Revolut would see an incoming payment from supposedly the same person, but with a different name, and lock the whole account down until documents could be provided proving why that happened. That means if you top up your Revolut account on saturday to buy some McDonalds, you are now going to be locked out of all financial services for probably 1+ week while you get official documents proving the name change. A marriage certificate isn't enough. If your salary is paid into Revolut, you might default on loan payments, loose your house/car, etc. All that to stop only the stupidest of money launderers. Smart money launderers know to use business accounts where the name of the account holder isn't checked by any bank.
      - deleted 7y ago
        [deleted]
      - uxcolumbo 7y ago
        > Smart money launderers know to use business accounts where the name of the account holder isn't checked by any bank. I don't quite follow - can you elaborate and explain the scenario?
        mschuster91 7y ago
        In Germany at least, when you order a transaction you have to specify recipient account holder name and IBAN. Recipient bank checks if the name on the IBAN matches with the one in their records (after normalization to reduce error rates e.g. from umlauts) and if there's an obvious mismatch reject the transaction. Business accounts however are not checked as tightly as people often enough either outright mis-spell the company name, use outdated company names, specify departments in the name and not the comment field, ...
- codedokode 7y ago
  Maybe that system was low quality and blocked valid transactions?
  - dyadic 7y ago
    Maybe it was, but that's not a good excuse. "We wrote some software to prevent money laundering but it was crap so we turned it off"
    - SpicyLemonZest 7y ago
      That seems like an entirely reasonable response in isolation. Sometimes you write new software and find it just doesn't work in production. Were they not doing anything else to prevent money laundering?
    - orf 7y ago
      > We attempted to write some software to prevent money laundering but it didn't work. So we turned it off. What are you talking about, that's completely reasonable.
    - bigiain 7y ago
      Or "We wrote some software to prevent money laundering but it worked properly and blocked heaps of profitable transactions, so we turned it off"

glogla 7y ago

Also Revolut CEO's father is CEO of Gazprom (or some division, I'm not sure I understand their structure). And it got it's money from DST Global incubator, which has Kremlin ties. Meaning, despite their London HQ, Revolut is Russian owned and Russian managed pseudo-bank. Giving them more money might not be great idea.

Peroni 7y ago
Considering both senior politicians in Lithuania and Luxembourg have raised formal concerns about Revolut's bid for a bank licence, specifically because of the CEO's alleged Kremlin ties, I'm willing to assume there's some substance to that concern.
- glogla 7y ago
  Them not having the license also means that the deposits aren't insured the way they normally are in EU, meaning you get nothing if things go wrong. We use Revolut around the office to split bills for lunches, etc, but I wouldn't keep more than few bucks in there.
  - tshanmu 7y ago
    edit: They have a banking license but current account customers now still get an e-money account only - quite confusing state. With an e-money account, the client money is supposed to be in a separate account and if they go under, you still get your money. (FCA regulates all this) They have a banking license from Lithuania (but customers are not switched to it) which might be revoked by Lithuania and they are trying for another license in Ireland. Thanks to comment below - edited this make more sense.
    - krn 7y ago
      Revolut received its banking license from Lithuania in December 2018, but hasn't switched its customers over yet. After the family connection with Gazprom became public, Lithuania started considering revoking the license, and Revolut applied for another one in Ireland. It's not clear now, when and which banking license Revolut will start using. It's worth pointing out, though, that Revolut already has more customers than there are tax payers in Lithuania[1]. [1] https://www.theguardian.com/money/2018/dec/22/lithuania-iceland-banking-revolut https://www.theguardian.com/money/2018/dec/22/lithuania-icel...

dgellow 7y ago

> The company quite literally has the words "get sh*t done" in giant neon letters on their office wall. That has become one of my red flag. I want to deal with people and companies focused on the quality of their products and businesses, not on doing "shit" (taking their motto literally).

wastedhours 7y ago
And after reading about their work culture, I also don't tend to trust companies that grind their employees down and spit them out. Banking is high pressure at the best of times, but reading about how they work doesn't fill me with confidence in their quality.
PhasmaFelis 7y ago
Absolutely. "Move fast and break things" is barely acceptable for services where failure is mostly just annoying, like social media. If your product is banking, medicine, transport, or anything else that can seriously harm people, "move fast and break things" amounts to criminal negligence.
- xenocratus 7y ago
  Amen. Another example of a field that I'm personally aware of and in which this kind of attitude should not be acceptable is cybersecurity. If your job is to protect people, then EVERYTHING you release has to be bulletproof.
  - unethical_ban 7y ago
    As someone in cybersecurity, I would offer an alternate perspective: That sometimes you have to lock things down despite not being absolutely certain of side effects, being willing to take some outages, if you ever expect to get something done. Analysis Paralysis is a real thing. Sometimes you just have to do it.
    - soverance 7y ago

catacombs 7y ago

> Revolut cited 'personal and health reasons' for the CFO's resignation. Whatever those personal and health reasons really were, they clearly passed quite quickly as within the space of a few weeks, said CFO has joined another FinTech company as their new CFO. Just waited for the golden parachute check to be cashed in.

dubliner2077 7y ago

And use candidates to your job offers so they do free marketing campaigns for you. Basically. To be honest, fuck Revolut, so use them with little money. Something is not right with these freaks.

rurp 7y ago
> And use candidates to your job offers so they do free marketing campaigns for you. Can you expand on this? I'm not sure what the reference is to.
- Peroni 7y ago
  https://www.wired.co.uk/article/revolut-trade-unions-labour-fintech-politics-storonsky https://www.wired.co.uk/article/revolut-trade-unions-labour-...

jacquesm 7y ago

> personal and health reasons That could easily be a way to say that he got threatened to leave that anti-money laundering system switched off 'or else'. Keep in mind that as soon as you create a way for organized crime to do their thing on your service and you are making money of them that they will happily consider you to be in their debt. It happens in the movies, and sometimes it happens in real life. Someone I know peripherally had something like that happen to him because of a series of movie theaters. Not good, even if you are not aware that such things are happening. This is why casinos, online gambling, bitcoin related stuff and payment systems as well as two-sided market places always require extra care, before you know it you have a bunch of criminal coat tail riders on board.

anthonybsd 7y ago

>Revolut's CFO recently 'resigned' from the company in light of claims that Revolut switched off an anti-money laundering system that flags suspect transactions. Revolut's CEO[1] is the son of the top bureaucrat of Russian Gazprom, which has been implicated as the main channel of - you guessed it[2], money laundering for Russian oligarchs [3]. [1] https://en.wikipedia.org/wiki/Nikolay_Storonsky https://en.wikipedia.org/wiki/Nikolay_Storonsky [2] https://panamapapers.sueddeutsche.de/articles/56fec05fa1bb8d3c3495adf8/ https://panamapapers.sueddeutsche.de/articles/56fec05fa1bb8d... [3] https://www.ft.com/content/2ebff9ee-38f6-11e9-b856-5404d3811663 https://www.ft.com/content/2ebff9ee-38f6-11e9-b856-5404d3811...

shitgoose 7y ago
[3] is paywalled. and there is no connection between [1] and [2] (i think putin's friends would crack up laughing at the prospect of laundering billions through a british startup). but the premise is correct - a unicorn who raised 5m for an online bank startup is hardly a serious option.
p1anecrazy 7y ago
As a Russian, I would like to point out that both degrees he has got (Moscow Institute of Physics and Technology and New Economic School) are from top-tier institutions. Money can't buy them and in general they are not attractive for rich kids. Also, Gazprom Promgaz != Gazprom. It's "a research institute for Gazprom" [1]. [1] https://en.wikipedia.org/wiki/Gazprom_Promgaz https://en.wikipedia.org/wiki/Gazprom_Promgaz
- booblik 7y ago
  Money can definitely buy them
  - omnimus 7y ago
    I would not be so sure abou that. But money can for sure buy you people who make your thesis.
- 7y ago

bezoisevil 7y ago

Ahhh move fast and break things, good ol agile.