
Revolut is at risk of losing its European banking licenses - MordodeMaru
https://www.siliconrepublic.com/companies/revolut-kremlin-lithuania-banking-license
======
atlasunshrugged
The sins of the father?

I wonder if there's more going on behind the scenes than meets the eye here.
It seems very strange to me that Lithuania, who has put a massive amount of
effort into becoming a friendly location for fintechs would risk alienating
such a big company on such a flimsy pretext as the founder being Russian with
a Russian father at Gazprom (I'm ignoring the server piece because I don't
know what to make of that - Russia is a big market and if they wanted to
expand I believe they need to have servers locally and it may be a cost
cutting move).

edit to add sources for context: [https://sifted.eu/articles/emoney-
authorisation-lithuania/](https://sifted.eu/articles/emoney-authorisation-
lithuania/) \- article describing Lithuania's push to become a fintech capital
[https://investlithuania.com/key-
sectors/technology/fintech/](https://investlithuania.com/key-
sectors/technology/fintech/) \- Government website describing the process and
their 'forward thinking' regulation
[https://www.engadget.com/2019/02/05/apple-russian-user-
data-...](https://www.engadget.com/2019/02/05/apple-russian-user-data-local-
servers/) \- article about Apple's storing of some user data on servers in
Russia to comply with the local data law

~~~
wfn
> _I wonder if there 's more going on behind the scenes than meets the eye
> here._

There are additional risks for Lithuania with regards to Revolut which are not
often discussed (but they have been raised by the parties concerned, and
others, etc.) Consider: Revolut is now (with its new banking license) able to
take in customer deposits. They are (by law) insured by the state (up to a
certain sum). If the bank goes bust, the state-owned insurer is on the hook.
Now consider Revolut's pan-European expansion plans (flaunting and expecting
continued aggressive growth). There is a lot of exposure here; through a
pretty dodgy company no less. So there really is a lot to consider here. Bank
of Lithuania (a regulatory body) _inviting_ Revolut themselves also doesn't
look too good. Hence parliamentary oversight steps in, with legitimate concern
on hand. Bear in mind that core intention is not always seeped in some kind of
behind-the-scenes malice, or pure populism, or what have you.

I personally see fintech as a field with some interesting companies and
potential for innovation, but also as a possible catalyst / accelerator of the
next tech-related bubble bust. One should invest into the field with care and
cautiousness.

~~~
vincnetas
Only deposits are insured. Having account on Revolut does not count as a
deposit. So until Revolut starts offering such option there is no risk. And
not sure if current license permits accepting deposits.

~~~
wfn
Yes, of course; but deposits will come, Revolut communicated as much (IIRC).
Also (IIRC) the license does permit accepting deposits, but as of now there
are limits / quantity constraints imposed. So there is that. But those limits
can be raised (and intuition (not knowledge) tells me it may not be hard; but
this also stems from my distrust of BoL and its regulatory oversight
capacity).

------
sschueller
They should loose their license for their business practices [1] irregardless
if they have ties to the Kremlin.

[1] [https://www.finextra.com/newsarticle/33454/tales-from-the-
da...](https://www.finextra.com/newsarticle/33454/tales-from-the-dark-side-of-
the-revolut-revolution-cfo-resigns)

------
roryrjb
All I care about is that my funds are safe. I currently have a lot in Revolut,
I've had nothing but positive experiences with them but moving to another bank
is not a big deal for me.

~~~
wil421
If they aren’t part of the legitimate banking system then likely your funds
are not safe. In the US you are automatically insured by the FDIC for up to
$250k per bank and per account type (like savings and checking).

Does the EU have a similar concept? If so, will you lose insurance if their
license is revoked?

~~~
megous
Yes, EU has something like that for up to 100000 EUR per person per bank.
Revolut is not a bank, so this doesn't apply there.

~~~
fastball
If they currently have a European banking license, how are they not a bank?

~~~
megous
Ask them. You can have a banking license and operate a grocery shop. I guess
you can have a banking license, not be a bank, and do some other money related
business.

Edit: I just looked at their website and didn't found any mention that they
are a bank. I'll violate their ToS and link to their website here:

[https://www.revolut.com/legal/website-
terms/](https://www.revolut.com/legal/website-terms/)

> We are regulated by the Financial Conduct Authority as an Electronic Money
> Institution under the Electronic Money Regulations 2011 for the issuing of
> electronic money. We are included in the FCA’s registered of electronic
> money institution firms (Firm Registration Number 900562) which can be found
> on the FCA website.

"Electronic Money Institution" is not a bank.

Interestingly you can't link to their website from social media without
violating their ToS. Funny. Also you can't link to them if you want to
criticize them.

------
robotmay
> The Lithuanian government has accused Revolut of having Kremlin ties before,
> which reached boiling point when it was reported that the company would be
> moving all of its servers to Russia.

That I did not know. I was an early user of Revolut but I've been done with
them for a while (their marketing team is responsible for me dropping it).
Time for me to send them a GDPR removal request I guess. They don't provide
any way of deleting your account other than going through their awful chat
support system so I guess I'll have to suffer through that again.

~~~
karl_schlagenfu
I have the same problem and didn't use it because of their scummy marketing
practices.

I uninstalled the app thinking I could just log in to the website to cancel it
but no luck, you have to phone.

Is there a simple way to submit GDPR deletion requests like this? They're
being deliberately obtuse with closing accounts. They deserve to lose their
licences.

~~~
jon-wood
A GDPR request may not go far because banking regulations supersede GDPR when
it comes to retaining records that might be required for financial
investigations. I believe in a UK there's a requirement that they hold onto
details of any transactions done for at least eight years.

~~~
robotmay
I understand the banking requirements but in theory they should only be
keeping certain information for security practices and scrubbing it from
everywhere else (e.g. marketing/analytics etc)

------
ddon
May be not related to the headline, but Revolut is locking many accounts
without any reasons and not much can be done... Would be nice to know where to
send a complaint about them in Lithuania, any ideas?

------
tasubotadas
Let me explain what's actually happening.

Some context first.

Lithuania's Central Bank (Lietuvos Bankas) is currently led by a rather modern
team which created a process that allows fintech companies to acquire "money
institution" or bank licence in a sandboxed environment. That means that
companies can only do non-risky business (like transfers) with a special
oversight. LB was/is quite vocal about their interest in attracting companies
from the UK in a post-brexit Europe as a banking licence in Lithuania is valid
in the whole EU.

The person that leads the central bank is Vitas Vasiliauskas and he is
strongly supported by the current president.

Quite a few companies have shown interest in this fast-tracked process (even
Google opened their branch). Revolut was one of them, as it is really popular
in Lithuania. I believe, that Lithuania is the third country by the number of
Revolut users (a year ago 3% of the population were using Revolut).

The commission (The Commission of Budget and Finance) that's responsible for
the investigation is lead by Stasys Jakeliūnas. He is a member of the current
ruling pro-peasant party. The commission itself is a part of the parliament.

One of the other things that the commission is also currently investigating is
the way the government has handled the crisis of 2008 and the role that the
banks have played when interested rates were being adjusted. The government
was led at that time by the current opposition.

The meat of the story.

Next month there is going to happen the elections for the parliament of the
EU, and a few weeks after a presidential election. In 2020 MP elections are
going to happen.

The current consensus is that whatever Mr Jakeliunas is doing is for the sake
of the elections. Their (LŽVS - peasant) party electorate is rather uneducated
and hates banks (banks=evil) in general so doing something against the banks
is supposed to score points.

Since the current president supports the candidate that's not supported by
LŽVS, going against LCB and Vasiliauskas is supposed to score some points for
their candidate (or rather something against the other leading candidate).
Also, they intend to score some points against the current opposition party
which is leading the polls due to the supposed connection in mishandling the
banks and the crisis itself in 2018.

Finally, since Revolut is backed by the investors (DSI Global) that are
originally from Russia and one of the Revolut's founders is Russian that's
another batch of free points because Lithuanian public hates Russia due to
rather well-known reasons.

So just you know, LCB and VSD (Valstybės Saugumo Departamentas - CIA
equivalent in LT) has done a thorough background check on Revolut and found no
national security risks.

I hope this paints a much clearer picture and I didn't miss anything
important.

TLDR; Jakeliunas is playing his part for the election and in the process of
doing that he is doing irreparable damage to the global image of Lithuania.

~~~
wfn
It is probably best to avoid political commentary on HN but since you provided
(one possible) political interpretation of these events which I am convinced
is absolutely incorrect, I feel compelled to (merely - nothing more) note for
others that it is just one possible interpretation; and that _calling it the
"consensus" is quite a stretch_; even when one's scope is restricted to
employees (past and present) within BoL. (I grant that yours is one possible
narrative, of course). I will add a couple of notes here and will then suggest
not to pursue the matter further, since its nature is both speculative _and_
political. :)

I will only ask you to consider --

> _Next month there is going to happen the elections for the parliament of the
> EU, and a few weeks after a presidential election. In 2020 MP elections are
> going to happen._

Consider observing how investigations will continue after the elections above
(need to wait for that). (2020 elections... may as well say that everything is
done as a function of the four year election cycle in that case, but that
would be a bit moot, I would think). Also consider that the recession /
VILIBOR etc. investigation conclusion dates were pushed ahead past the target
May 2019 election dates (which had been agreed by a parliamentary vote back in
2018, _voted for by opposition as well, including their main presidential
candidate (she hadn 't decided to go ahead with her candidacy back then), by
the way_) - and this push-ahead was an idea suggested and advocated by the
chairman of the commission. P.S. besides VSD there is also FNTT, and FNTT has
a pretty different (and rather bleak) outlook on these matters.

~~~
tasubotadas
Why should one avoid political commentary on HN? It's FULL of it.

>"consensus" is quite a stretch

Well, for everybody that's not related to LŽVS.

>which I am convinced is absolutely incorrect

You forgot to share the things why do you think that's incorrect.

~~~
wfn
> _Well, for everybody that 's not related to LŽVS._

That is not true: there are people in BoL who do not share your view at all.
How do you think the internal VILBOR report came about and resurfaced
initially (BoL was later forced to publish it)? Unfortunately, we will have to
be patient until the names and views of the people become public, if it comes
to that. I hope it does, but there is also backlash and retribution for them
awaiting from within BoL. I know this all sounds speculative, so the only
thing I can ask is some patience.

> _You forgot to share the things why do you think that 's incorrect._

I can expand, but I do not think this is the place to do so. I also do not
think I am capable of currently convincing you otherwise; I hope in time we
shall see. I'll consider adding more details later. But my purpose in replying
to you was to merely communicate that there is no definite consensus at all.

