FCA Orders Epayments Systems to Suspend Operations on AML Concerns

Epayments Systems Ltd, an electronic money institution focused on online payments for affiliate marketing industry, has suspended its operations over lapses in its anti-money-laundering procedures.
ePayments published a short statement on its website today giving a few details on the regulatory checks that have led to thousands of customer accounts being frozen. The update reveals that the UK’s financial watchdog, the Financial Conduct Authority (FCA), is behind the whole thing.

ePayments, which claims to have signed one million users, said the watchdog had forced it to freeze all of its customer accounts and banned new account openings “until remedial action has been undertaken to the satisfaction of the FCA.”
The notice further explains that this decision was taken following a regulatory review of its anti-money laundering systems and controls. That review finished but the City watchdog was not happy with the findings that identified “a number of weaknesses which require urgent remediation to ensure that customers can enjoy a safe and secure platform.”
The regulator told Epayments Systems to stop everything until it had put in place stricter checks to make sure its services weren’t cleaning cash for criminals. During the course of this suspension customers will be unable to transfer, deal, withdraw or deposit funds and will be unable to use their ePayments cards.
The troubled payment company said customers can rest assured that they are doing everything in ‎our power to resolve the current issues. Customer balances are protected in segregated accounts with major banks and Epayments is mobilising required resources to complete the verification project.
“We know this will be a very frustrating time for our customers. We apologise for any inconvenience caused and are working tirelessly with the FCA to ensure improvements are made and accounts can be reactivated as soon as possible. During this improvement process, we want to assure customers that their funds are being safeguarded as normal,” it added.
Crypto in the background
It’s not clear what has led the FCA to suspend the operation of the regulated e-money company, but the team behind ePayments was previously involved with a crypto exchange called Digital Securities Exchange (DSX).
With the UK thrashing its crypto regulation into shape, some crypto providers had no choice but to  while the consequences upon related partners will likely be wide-reaching.
ePayments Systems Ltd has been an authorised electronic money institution with the UK regulator since 2015. The company is approved to issue virtual accounts with IBAN, prepaid cards, process payments, issue e-money, and handle electronic money wallets with the FCA license giving it permission to operate throughout the EU.
At the time, DSX’s status as a registered agent of the FCA-regulated regulated startup was seen as an added layer of scrutiny to the crypto exchange. Users were obliged to pass KYC procedures and disclose ID information to ePayments Systems as part of anti-money laundering rules the issuer must follow.
A wave of new regulations is introducing stricter requirements for companies operating in the cryptocurrency industry, in particular measures stemming from EU’s Fifth Anti-Money Laundering Directive ().

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *