Starling Bank Fined £29 Million by UK Regulator for Lax Sanction Controls
Starling Bank, previously known for banning all crypto-related transactions, has been hit with a hefty £29 million fine by the UK’s Financial Conduct Authority (FCA) for its inadequate sanction controls.
Back in 2022, Starling made headlines when it decided to prohibit crypto transactions due to their perceived high risk and association with criminal activities. However, a recent investigation by the FCA revealed that the bank’s lax approach left the financial system vulnerable to exploitation by criminals and individuals subject to sanctions.
The FCA had raised concerns about Starling’s anti-money laundering and sanctions framework in 2021, prompting the bank to agree not to onboard high-risk customers until the issues were addressed. Despite this agreement, Starling went on to open over 54,000 accounts for 49,000 high-risk customers between September 2021 and November 2023.
Furthermore, Starling discovered in January 2023 that its sanctions screening system had been ineffective for six years, screening only a fraction of designated individuals. At one point, the system failed to cross-check against 3,049 sanctioned individuals.
A detailed Sanctions Screening Review of Starling revealed that the bank had not adequately assessed its sanctions risk and overlooked key factors such as payments from crypto-related platforms and multicurrency accounts.
Initially, Starling was slapped with a £41 million fine. However, the FCA granted a 30% discount after the bank committed to addressing the compliance breaches. The regulator acknowledged Starling’s efforts to remediate the breaches and enhance its overall financial crime control framework.
Read more: Chase Bank tells UK crypto users to take their business elsewhere