Facing accusations of illegally using client accounts to move money to its U.K. headquarters from a Brazilian bank, Wise (formerly Transferwise) vehemently denied those actions and said it is the target of a smear campaign.
MS Bank, a former local partner of Wise, claims that London-based Wise used the names and data of more than 600,000 customers to send money abroad irregularly and without paying taxes. The bank is alleging fraud of about £12 million (U.S. $16.7 million).
The bank’s letter outlining its accusations included a hypothetical video in which a customer makes a money transfer order and Wise inflates the price upon reporting it to MS Bank. In addition, the bank encourages customers who have made transactions with Wise to check the Brazilian Central Bank’s registration system to see if the amounts reported exactly match what they ordered.
Wise told PaymentsSource it has had no commercial relationships with MS Bank since Feb. 18, and said that until that date MS Bank was responsible for reporting foreign exchange transactions to Brazil’s Central Bank.
“TransferWise Brasil reinforces that it strictly follows tax laws and local regulations in Brazil and more than 50 countries in which it operates,” Wise stated in an email. “The company recently received authorization from the Central Bank of Brazil to operate as a foreign exchange broker in the country. With the authorization of a foreign exchange broker, TransferWise is in the process of conducting foreign exchange transactions directly, without the need for an intermediary.”
Wise said it is unaware of any investigation or accusation against it by any regulator or other authority, ading it is the target if a “smear” campaign by a former business partner after the partnership’s termination.
TransferWise changed its name to Wise late last month in preparation of its IPO later this year. MS Bank interrupted its operations with Wise at about the same time, saying at that time it had launched its own platform and did not need Wise as a foreign exchange correspondent in Brazil.
“TransferWise Brasil reinforces that it maintains its commitment to the transparency and security of the operations of more than 10 million customers around the world,” the Wise statement continued. “In addition, it guarantees that, in its operations, no fraudulent or improper activity was carried out with customer data and/or funds, which at no time had a financial loss or were exposed to legal risks when using our services.”
The company also noted that TransferWise Brasil “will take all legal — civil and criminal measures — applicable against those responsible for defamation acts.”
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