Shares plunge as Wise faces European probe

(Sharecast News) - Shares in Wise tanked on Monday after it emerged the fintech is being investigated over potential money laundering failures.

According to The Bureau of Investigative Journalism, which broke the story, prosecutors in Belgium opened a probe into the London-based payments specialist last year, after noticing that Wise accounts had featured in hundreds of requests for cross-border help in criminal proceedings from more than 30 countries across Europe. The report said the transactions amount to €500m.

The investigation, which relates to Wise's European operations, is centred on "indications of non-compliance with anti-money laundering legislation".

In a statement, Wise said it was working with the Brussels prosecutor "to respond to queries about our business, as we regularly do with regulators and law-enforcement authorities.

"His office's enquiries are still incomplete, and no specific findings have been shared with us to date. As such, it would be speculative for us to comment on any allegations."

But it concluded: "Combating financial crime is an industry-wide challenge that Wise takes extremely seriously.

"Like every financial institution, we face the reality of increasingly sophisticated bad actors attempting to exploit our platform, and we continually invest in tech-enabled systems and teams to stay ahead of ever-evolving threats."

As at 0945 BST, the stock had tumbled 14% in London to 804.86p, and shed 16% in pre-market trading in New York.

Wise has grown massively since chief executive and co-founder Kristo Kaarmann launched the business as TransferWise in 2011. It debuted on the London market in 2021 but moved its primary listing to Nasdaq last month.

Net revenues came in at $2.5bn in the year to March end, a 19% hike, and it now has around 3m customers in the UK alone. Globally it has around 15.6m active personal and business customers.

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Wise Group