A person listed as subject to the U.K.'s Russia sanctions was granted a withdrawal of £250 ($316.63) from a business account on Wise, a company that the Office of Financial Sanctions Implementation (OFSI) said had completely disclosed all information and collaborated with them during their investigation. This is one of the rare instances of a fintech firm being open about a violation of their sanctions.
On Thursday, the Office of Financial Sanctions Implementation reported that international financial services firm Wise had enabled a person on the U.K.'s sanctions list to withdraw £250 ($316.63) from a business account. The person in question was the owner of a company that had an account with Wise. In response to the Russian invasion of Ukraine in February 2022, the British government imposed new measures and designations, placing many banks and individuals on a sanctions list. Wise reported the suspected breach on June 30, 2022, and fully cooperated with the OFSI during the investigation. A spokesperson from Wise did not provide a response to CNBC's request for comment. This incident is amongst the few publicly disclosed sanctions violations by a fintech company; the OFSI declined to impose a monetary penalty on Wise for the breach. The small sum of money involved in the breach adversely affected Wise's stock, which was already underperforming in the payments and fintech sector. Jefferies analysts noted that the company's CEO, Kristo Kaarmann, could take on a different role, with Chief Technology Officer Harsh Sinha filling in during Kaarmann's three-month parental leave, potentially leading to a permanent change in leadership. Wise has not indicated such a move.
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