Klarna CEO Questions Role of Swedish Financial Regulator After Being Fined
Hey FinTech Fanatic!
Klarna has decided not to appeal its $50M fine from the Swedish financial regulator (FI) for anti-money laundering rule breaches, but their CEO is raising questions about regulatory oversight. Sebastian Siemiatkowski, Klarna CEO and co-founder, highlighted the challenges in interpreting compliance requirements, stating the company had actively sought guidance from FI on money laundering rules interpretation.
The regulator's investigation revealed that between 2021 and 2022, Klarna showed "significant deficiencies" in its risk controls, particularly lacking assessments of how their products could be used for money laundering or terrorist financing.
According to Siemiatkowski, appealing the fine would be "pointless" as it would only test whether the regulator followed the law, not whether Klarna's interpretation of the rules was correct. He emphasized that despite their proactive attempts to seek clarification, the regulator maintained that "their role is not to consult, we are to interpret, then they judge our interpretation."
Siemiatkowski argues that the current regulatory structure, where FI acts as "police, prosecutor, and court," raises important questions about regulatory effectiveness: "Not because there was money laundering, but because we interpreted 'wrong'." This hints at broader challenges FinTechs face in navigating regulatory compliance.
Have a great Tuesday. I'll be back with more FinTech industry updates tomorrow!
Cheers,
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