Revolut faces new legal battle over ‘£600,000 fraud’

Beleaguered fintech firm Revolut has been accused of enabling a £600,000 fraud, The Mail on Sunday can reveal.

Terna Energy Trading, listed on the Athens stock market, has launched legal action against the UK bank over claims it breached money laundering rules by failing to stop a ‘fraudulent’ transaction last year, court papers reveal.

The row will increase scrutiny of Revolut operations, which are under intense focus as the start-up fights for a British banking licence. Founded in 2015, it is the UK’s most valuable fintech, but has been waiting more than two years for full regulatory approval, and has been hit by embarrassing setbacks.

This includes key executives leaving and a warning from its auditor that delayed accounts may have been ‘materially mis-stated’.

A court battle will pose another headache for co-founder Nik Storonsky, who recently lashed out at Bank of England officials over the licence delay, claiming it had been a ‘long and tiring process’.

Terna alleges that criminals stole £600,000 from its account after bypassing Revolut’s systems.

Documents filed in the High Court reveal fraudsters tricked Terna into paying cash to a fake supplier, which was processed through Revolut in February 2022.

The payment was initially frozen by anti-money laundering software, but a Revolut analyst in Lithuania later waved it through.

Revolut’s headquarters are in the UK but has 28 million customers worldwide and holds a licence from the Lithuania regulator.

Terna claims it alerted an online Revolut agent who did not ‘take any steps to investigate the payments or refer the matter to the relevant team’, and is suing for damages under the Proceeds of Crime Act. 

In 2019 the Financial Conduct Authority made enquiries into the bank over compliance concerns after an ex-employee claimed systems for flagging suspect payments were not good enough.

Revolut has also lost several key figures in its risk and compliance team since 2020. It was set up in London by former Credit Suisse and Lehman Brothers trader Storonsky, 38, and Vlad Yatsenko, 39.

Customers can open an account and have a debit card, but the bank cannot hold deposits or lend until it has a UK licence.

The bank has yet to file its defence in the case. It said: ‘We are sympathetic to all victims of sophisticated authorised push payment fraud and strongly urge everyone to remain vigilant against organised criminals trying to steal money.

‘We take fraud seriously but can’t comment on allegations subject to legal proceedings.’