Shares of Wise experienced a sharp drop in London trading on Monday after the payments company confirmed it is engaging with the Brussels prosecutor's office in relation to queries about alleged misuse of customer accounts.
Media reporting earlier in the day indicated Belgian authorities opened an investigation last year into concerns that the Wise platform was being used to launder proceeds tied to fraud, drug trafficking and corruption. In response, the company said it is cooperating with the prosecutors.
Wise emphasized that such interactions with law enforcement are a routine element of its operations. In a statement, the firm said: "Requests for information from law enforcement agencies are a normal part of operations and are not, in themselves, indicative of non-compliance with anti-money laundering requirements or of any wrongdoing."
The stock fall was dramatic. Shares lost as much as 19% at one point on Monday - the steepest intraday decline since the business listed on the public markets in 2021 - before trimming losses to trade roughly 13% lower at about 812 pence by 08:52 GMT.
Wise outlined the suite of controls it uses to prevent financial crime, noting it carries out customer verification before accounts are opened, monitors transactions, offboards customers when necessary, and reports suspicious activity to the relevant authorities.
The company also said it has been bolstering its compliance capabilities. Wise reported spending 31 million in the six months to September 30 on compliance infrastructure and related investments, describing the expenditure as necessary to operate in a highly regulated environment and to address increasing financial crime risk while supporting long-term growth.
The news about the Belgian probe arrived shortly after Wise changed its primary listing from London to New York last month. The company maintained a secondary listing in London, where it is headquartered and where it initially listed in 2021.
Context and market impact
Market reaction to the disclosure of the investigation was swift, with the company's London-listed shares recording their biggest intraday fall since their initial public listing. The combination of a regulatory inquiry and a sizeable, ongoing compliance expenditure contributed to investor concern during the session.
Operational countermeasures
Wise set out the principal elements of its anti-financial crime program, which it says include:
- Identity checks for customers prior to account opening
- Ongoing transaction monitoring
- Offboarding of customers where required
- Reporting of suspicious transactions to authorities
The company framed its recent compliance spending as part of maintaining capabilities to operate amid rising regulatory scrutiny and financial crime risk, while also investing for sustainable growth.
What remains unclear
The company confirmed cooperation with the Brussels prosecutor's office but did not disclose additional details about the scope or specific targets of the Belgian inquiry. The reporting that prompted the company's statement attributes the investigation to concerns that customer accounts had been used to move illicit proceeds linked to fraud, drug trafficking and corruption.