100 U.K. E-Money Firms Raise Dirty Money Red Flags, Report Says
(Bloomberg) -- The U.K.’s burgeoning electronic-money sector, home to hundreds of payments firms, is facing “critical” money-laundering risks and needs tougher supervision from regulators, a study says.
More than one-third of about 260 Electronic Money Institutions, or EMIs, show money-laundering red flags, according to the report from Transparency International UK, the British arm of the global anti-corruption organization. That includes firms with poor controls or said to be processing criminal wealth.
The study suggests that Europe’s burgeoning payments sector has problems beyond German firm Wirecard AG, which imploded with $2.3 billion in lost funds, and questions whether U.K. rules are being enforced strongly enough.
“Although EMIs present an exciting business opportunity for investors and customers alike, the speed of their growth has yet to be matched by their oversight,” said Ben Cowdock, investigations lead at Transparency International UK. “Without a tighter grip on those controlling and managing these firms, there’s a real risk of this industry becoming a new frontier for money launderers.”
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