UAE-Based Fintech Company Penalised for Anti-Money Laundering Shortcomings

Abu Dhabi, October 4, 2023 – In a significant development, Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority has levied a substantial fine of $486,000 on Pyypl, a UAE-based financial technology company, for its failure to adequately adhere to anti-money laundering (AML) regulations.

During the period from March 2021 to November 2022, Pyypl was found lacking in ensuring the sufficiency and effectiveness of its AML policies, procedures, systems, and controls, as required to meet AML obligations. This included effective monitoring and detection of suspicious activities and transactions, according to a statement issued by the regulatory authority.

Among the key shortcomings identified were Pyypl’s inability to conduct essential AML risk assessments and due diligence on its customers. Furthermore, it did not assess the expected payment volumes of its customers comprehensively, and it failed to consider all its services during customer AML risk assessments.

It is essential to note that the regulatory review did not uncover any instances of actual money laundering linked to the inadequacies in Pyypl’s systems and controls.

In addition to these findings, between May 2021 and November 2022, Pyypl arranged for its customers to purchase insurance contracts from a third-party provider using an application provided by Pyypl. This activity was deemed as insurance intermediation without the requisite authorisation.

Pyypl, based in ADGM, chose not to challenge the findings and agreed to expedite the settlement of the fine. As a result, the company qualified for a 20% discount on the penalty, which would otherwise have amounted to $607,500, as stated by the regulatory authority.

The statement from the regulatory authority emphasised that Pyypl and its senior management cooperated fully with the investigation and took corrective actions in response to the identified issues, subject to verification by the regulatory body.

The UAE has made significant strides in its efforts to combat money laundering, terrorism financing, and weapons proliferation in recent years. It has enacted robust legislation and regulations aimed at curbing financial crimes and ensuring compliance with international standards.

Emmanuel Givanakis, CEO of ADGM’s Financial Services Regulatory Authority, reaffirmed the authority’s commitment to maintaining high standards in combating financial crime and AML risks. He emphasised that the authority would not hesitate to take stringent measures to ensure firms’ full compliance with AML requirements within ADGM and to prevent authorised firms from engaging in regulated activities beyond the scope of their licenses.

In the first quarter of this year alone, the UAE imposed fines exceeding Dh115 million ($31.3 million) in its ongoing fight against money laundering and terrorism financing. In July, the UAE’s Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism collaborated with the World Bank to enhance its framework for combating financial crimes.

For more insights on AML compliance and the latest developments in the legal and financial technology sectors, stay connected with Verify 365.