The financial technology company, QPay, has agreed to a court order to give up £2,000,000 held in its name to the Financial Conduct Authority (FCA), the UK’s financial industry regulator.
The FCA in a press statement released on Thursday said QPay’s consent is in obedience to a court order issued by District Judge Cieciora at Westminster Magistrates’ Court in London.
The regulator said it had prayed the court to grant the forfeiture order under the United Kingdom’s Proceeds of Crime Act (POCA) 2002.
What’s the Fund About?
According to the FCA, the money is the proceeds of illegal activities connected to criminal proceedings in the United States.
These proceedings, the watchdog further explained, are related to an alleged conspiracy to commit wire fraud against banks, credit card companies and other financial service providers in the US.
However, the regulator said it is not alleging that QPay is connected to the conspiracy.
The FCA noted that it first raised concern about the money following an application by QPay to become a regulated firm in March 2020.
The agency added that QPay “claims to be a fintech startup offering due diligence and underwriting services.”
The FCA explained, “The FCA’s concerns were raised following an application by QPay to become a regulated firm in March 2020. QPay received the money from software firm, Fintech International Q Software WLL, allegedly as an investment.
“However, the FCA observed QPay moved the money repeatedly to different bank accounts in several countries and none of the transactions appeared to be related to legitimate business. QPay has withdrawn its application to be regulated by the FCA.”
Mark Steward, the Executive Director of Enforcement and Market Oversight at the FCA, said the money will be used to assist the regulatory body and other authorities in fighting illegal activities.
“The FCA will continue to vet applications for authorisation to ensure firms meet our standards of integrity as well as competence,” Steward added.
Securing the Forfeiture Order
The FCA disclosed that the money was initially frozen in urgent proceedings instituted by the FCA in October and December 2020.
“Seven account freezing orders in respect of these monies were obtained by the FCA Proceeds of Crime Team in October and December 2020 under Section 303Z1 of the POCA 2002. The application for the monies to be made forfeit was in October 2021,” the FCA said in the statement.
Additionally, the regulator noted that the powers to apply to freeze monies held in bank accounts were granted to it through amendments to the POCA 2002 made by the Criminal Finances Act 2017.
FCA's Recent Warnings
Earlier this month, the FCA warned investors against trading firm, Etradefxlive, which it said has not been authorized by it and could be a clone firm of the American financial services firm, E*Trade.
Moreover, the body last month warned investors against another clone firm, AZOptions, which it said was impersonating Octopus Investments Limited in order to scam unsuspecting investors in the European country.
In the same month, the watchdog raised the alarm against another firm that was cloning XTB, a broker that belongs to XTB Group and whose branch in the UK, XTB Limited, is being regulated by the agency.
