The decision follows a review of the Buy Now, Pay Later company’s practices from March 2021 to March 2022, which identified significant deficiencies. These included a failure to assess how its services might be exploited for money laundering or terrorist financing activities.
The Financial Supervisory Authority (FSA) stated that while the breaches justified a financial penalty, they were not severe enough to warrant a formal warning or a revocation of Klarna’s banking licence.
The investigation has concluded, but the FSA expects Klarna to address the identified shortcomings promptly. The FSA’s Director of Money Laundering Supervision explained that no specific timeline has been imposed for corrective actions.
Klarna, which obtained its banking licence in 2017, characterized the review as a routine regulatory process and emphasised that the findings were not linked to any confirmed incidents of money laundering. Company representatives revealed that they engaged in constructive dialogue throughout the process as part of their dedication to ensuring a secure financial ecosystem.
Klarna is reportedly preparing for a US initial public offering (IPO) and recently filed documentation with the Securities and Exchange Commission. Potentially valuing Klarna between USD 15 billion to USD 20 billion, the initial public offering could occur after the SEC review and the timing could be influenced by market circumstances. Also, Klarna underlined the price range and number of shares to be provided in the IPO are yet to be determined.
Klarna is among several Swedish fintech firms scrutinised by regulators in recent years. In 2021, payments company Trustly received a warning over similar concerns, which subsequently led to the withdrawal of its planned USD 11 billion IPO according to Reuters.
For more information about Klarna, please check out their detailed profile in our dedicated, industry-specific Company Database.
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