- LeoPay customers started complaining over the weekend because they could not access their accounts
- SataBank was ordered to stop processing deposits or withdrawals
- Many of the fintech’s clients opened an account with LeoPay because they do not have a European account
UK-based fintech LeoPay has left its customers’ accounts frozen after the Maltese government’s move to halt activities at a financial institution co-owned by LeoPay’s founder Christo Georgiev. Customers started filing reports over the weekend according to the Financial Times.
The international money transfer firm is facing a huge problem as customer accounts were frozen without warning. It has also brought old fears to the surface as a number of customers who use digital money transfer services keep large amounts of cash in their accounts instead of depositing it in a brick and mortar bank. LeoPay offers non-residents a de facto European account through Maltese bank SataBank. It is noted that said accounts are not covered by any type of deposit guarantee.
SataBank has been operating since 2016 and after barely two years, it was ordered by the Malta Financial Services Authority (MFSA) to halt its operations. In a report from the Malta Independent, the MFSA said that this needed to be done to “ensure that the interests of the depositors are safeguarded”. Other Maltese media outlets note that the order from the MFSA stemmed from the bank’s lack of anti-money-laundering controls. In July 2018, SataBank was fined by the government agency after it breached risk management laws in the country.
LeoPay immediately removed all reference to the Maltese bank on its website when the MFSA order was made public. Georgiev has not yet released a statement according to reports. LeoPay did issue a statement though and it said that there is only “a limited number” of customers who are affected by the SataBank problem. A LeoPay customer reportedly has cash amounting to €11,000 in his account with the fintech but the app is showing a zero balance.
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