U.S. regulators refuse to issue license due to compliance shortcomings, Wise Group's share price plummets
The company's London-listed stock fell as much as 11%, but the decline narrowed later. Wise changed its primary listing to Nasdaq earlier this year. U.S. regulators have rejected Wise Group’s application for a U.S. trust banking license, citing gaps in anti-money laundering mechanisms. Financial technology company Wise Group's London-listed shares fell after U.S. regulators rejected its application for a U.S. trust banking license, finding flaws in the company's anti-money laundering and counter-terrorist financing compliance system. Wise's London-listed shares fell as much as 11% in early European trading on Friday before recovering. Wise has moved its core listing location this year to . The company said that since it first submitted its license application, it has invested a lot of resources to upgrade the full-process risk control system in the United States and globally, and improve financial crime prevention and control and various risk management and control mechanisms. Wise said it plans to resubmit its application for a National Trust Bank license in accordance with the Genius Act, the landmark stable coin bill signed by President Trump. Trust banks generally do not accept deposits or grant loans. The U.S. Office of the Comptroller of the Currency (OCC) stated in its rejection letter that Wise’s application contained major regulatory compliance risks, pointing to Wise’s U.S. subsidiary’s long-standing compliance deficiencies in anti-money laundering and counter-terrorist financing. Wise responded by working to correct the remaining issues with the initial application mentioned in the Office of the Comptroller of the Currency’s letter. Since submitting the application for the first time, the company has strengthened its compliance program in the United States, upgraded its suspicious transaction investigation and reporting process, and implemented a number of rectification measures. Wise said that during preparations for the new round of applications, existing daily operations will not be affected by the regulatory rejection decision. The company relies on existing money transfer licenses held in 48 U.S. states and 4 overseas territories to maintain normal operations. A few months before the U.S. Office of the Comptroller of the Currency’s approval, Wise transferred its primary listing to New York while retaining its secondary listing on the London Stock Exchange. When the company initially announced its plans to launch in the United States, Wise said that the United States was the market with the greatest global development potential for its products.