Crypto News: UK Regulators Target Revolut For ‘Material Misstatement’ In Audit

The Financial Reporting Council of the United Kingdom reportedly discovered problems in the audit of crypto-friendly payments app Revolut that included a “unacceptably high” risk of “material misrepresentation.”

iexclusivenews reports that according to a Financial Times report published on Monday. The United Kingdom Financial Reporting Council criticized the results of a Revolut audit released in July by accountancy and business advisory firm BDO.

Claiming the company had a “inadequate” approach to revenue recognition and “the risk of an undetected material misstatement was unacceptably high.”

According to the banking authorities, BDO failed to appropriately test Revolut’s payment operations.

Following a $800 million financing round headed by Japan-based banking conglomerate SoftBank and United States-based hedge fund Tiger Global, Revolut was valued at $33 billion in July 2021.

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According to the Financial Times investigation, the payments processor was under pressure from auditors to enhance its internal controls in order to comply with UK legislation.

“The auditors are being significantly more challenging now, because they’re getting beaten up by their regulators,” reportedly said an individual familiar with the situation.

Revolut was the only firm operating in the United Kingdom under interim registration from the country’s Financial Conduct Authority, or FCA, at the time of publishing.

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Firms “carry[ing] out crypto asset activities” in the United Kingdom must register with the FCA as part of their Anti-Money Laundering and Combating the Financing of Terrorism compliance.

However, after the registration expired in March, 12 enterprises continued to function under interim status until just Revolut remained on June 30.

According to sources, Revolut’s top executives, including the company’s head of regulatory compliance and money laundering reporting officer, left in 2022.

However, iexclusivenews Nigeria reports that Revolut Group Holdings and its crypto unit Revolut FIC must file their 2021 accounts by the end of September..