The online bank N26 is the focus of the Berlin public prosecutor’s office. Due to suspicion of money laundering, the start-up’s management staff is under investigation.
Investigations against four people
Handelsblatt had researched the case in question and addressed an inquiry to the responsible public prosecutor’s office, which subsequently confirmed that four executives of the company are under investigation. Specifically, the case involves accounts that were used for fraudulent purposes and were not promptly blocked by N26. According to the Handelsblatt, there are numerous complaints from victims who transferred money to accounts operated by N26 for goods that were not shipped and the like.
The current investigations are thus a seamless continuation of those conducted by the financial supervisory authority last year. At the time, Bafin had identified deficiencies in risk management at N26. Suspicious activities had not been sufficiently monitored, prevented and reported. As a result, the bank had to pay a fine of 4.25 million euros. In addition, Bafin had imposed a growth restriction: N26 has since been allowed to take on only 50,000 new customers per month. This block is due to the fact that Bafin sees the start-up’s massive growth as the main reason for its poor risk management.
Complaints about excessive workload
In addition to these external problems, complaints from within the bank also paint a picture of excessive demands: in 2020, a works council was elected against the resistance of the management; employees of the customer service department had complained about an excessive workload.
The new investigations against N26 thus stand in a long line of similar incidents. In this context, it is astonishing that the company has not suffered any permanent damage so far, but on the contrary continues to grow. In October, it had announced that it had received a further $900 million from a financing round. This makes N26 one of the most highly valued start-ups in Germany.
