Money transfer giant Wise has been fined $4.2 million by multiple US state regulators due to deficiencies in its anti-money laundering (AML) controls.
This multi-state settlement includes regulatory agencies from New York, Massachusetts, Texas, California, Minnesota, and Nebraska. In addition to the penalty, Wise has been ordered to conduct a retrospective examination of previously closed accounts, enhance its reporting procedures for suspicious activity, strengthen its due diligence on AML and countering financing of terrorism (CFT) risks, and improve systems ensuring data integrity related to customer accounts.
Under this order, Wise will engage an independent third party to verify that corrective actions have been executed and, for the next two years, must submit quarterly progress reports to the multistate regulators.
NYDFS superintendent Adrienne Harris emphasized the importance of collaboration with state partners to ensure that money transmitters meet rigorous standards to protect consumers and maintain the integrity of the financial system. She highlighted that strong relationships with both state and federal regulators are essential for fostering a fair and resilient financial environment.
A spokesperson for Wise stated: “Wise takes its responsibility to provide a safe and secure service to our customers very seriously. Between July 2022 and September 2023, the Multi-State MSB Examination Taskforce (MMET) conducted a routine examination of Wise US, Inc. Wise fully cooperated with regulators to implement their recommendations and continues to heavily invest in its compliance and controls framework.”
This isn’t the first regulatory challenge Wise has faced in the US. In January, the Consumer Financial Protection Bureau (CFPB) imposed a $2.025 million penalty on the firm for misleading customers about fees and charges, later reduced to $44,955.
Additionally, Wise has encountered issues with money laundering regulations in other jurisdictions, including a $360,000 fine from Abu Dhabi’s financial regulator in 2022 for failing to establish adequate AML systems. The firm has also been ordered to undertake a remediation program in Europe after the National Bank of Belgium found that it lacked proof of address for hundreds of thousands of customers.