Shares of Wise fell 9% on Friday morning after the U.S. Office of the Comptroller of the Currency (OCC) rejected its application for a National Trust Bank charter, dealing a severe setback for the cross-border payments company in its core growth market.
As major financial technology companies, Including revolutionsought national trust bank charters in the U.S. Wise’s denial represents the first high-profile denial under the Trump administration, which has so far maintained a lighter touch.
Wise’s request, which was filed a year ago, presents “significant oversight and compliance concerns,” the ACCC said in its decision.
The regulator stressed that the company’s proposed management and board “demonstrated a persistent inability” to manage money laundering and terrorist financing risks.
The focus of the law of genius
In response, Wise issued a letter opposing the ruling, arguing that the regulator was ruling on an old snapshot of its operations.
“Since submitting this original request over a year ago, our business has evolved and compliance has matured significantly,” the company said. “This includes changes we made in response to OCC comments throughout the application process, and the OCC letter published today points out these historical issues in our original application that we addressed.”
Wise also noted that his original file was outdated Under the GENIUS ActWhich created the first US regulatory framework for cryptocurrencies.
The company confirmed that it now intends to file a new application under the law to achieve its goal of directly accessing the US federal payments network.
Pattern of regulatory audit
The OCC’s rejection adds to a series of similar regulatory hurdles Wise faces on both sides of the Atlantic.
Just last month, the group’s shares fell nearly 20% in one day following news… An investigation conducted by the Belgian authorities In possible money laundering and alleged misuse of accounts by international criminal groups.
In the United States, the group’s American subsidiary was fined nearly $4 million last year after federal regulators found it violated the Bank Secrecy Act and anti-money laundering rules under the Anti-Terrorism Financing Program.
The broader impact of the OCC decision
The rejection falls at a sensitive moment for Wise.
The company coordinated it High-profile move to Nasdaq To boost its visibility and capture what executives described as “the largest market opportunity for our products in the world today.”
Direct access to the Fed’s payment paths via the US Trust Bank charter would have allowed Wise, or any fintech company for that matter, to route US dollar flows through its main account at the Fed, reducing reliance on correspondent banks and potentially improving margins.
Without the charter, the fintech would continue to serve customers in the United States under its current patchwork of government money transmitter licenses, but the denial limits its ability to approach the vertically integrated, bank-like operating model that traditional institutions enjoy.
This article was written by Adonis Adoni at www.financemagnates.com
Source link
