[rchaud]

CFO's comments to The Guardian in December 2022 (the article also mentions the auditor's concerns)[0]:

> Mikko Salovaara, its chief financial officer, told the Guardian in an interview that the company was on the brink of getting a banking licence from City regulators: “I think we’re at the very last stages. Really at the finish line.” Salovaara said the UK licence was a step towards achieving Revolut’s aim of becoming a “truly global bank”. It would allow the company to offer “an increasing set of services to our customers, particularly credit.”

Sounds like another Wirecard. There's even the cliched startup quote "we want to be the Amazon of banking". WC wanted to be the Paypal of Europe. Amazing how far you can get before you've earned a single cent of profit!

[0] https://www.theguardian.com/business/2023/mar/01/uk-fintech-...

[exizt88]

There’s a huge leap between fucking up your accounting systems and doing outright fraud. This isn’t even close to what WC was doing, at least from the available information.

[rchaud]

If you're providing financial services in a heaivily regulated industry, it's not that big of a leap. The company has a pending application for a UK banking license for the past 28 months; the turnaround time for that in the UK is 12 months. Yet even now, they have filed their accounts several months late, and without a clean bill of health from the auditor.

The CFO of all people should have advised withdrawal of their application until internal controls were sorted. That they're resigning instead doesn't bode well.

From the FT, their UK operations chief departed as well: https://www.ft.com/content/f27f6b80-d32d-4913-991d-c512f6e90...

[skippyboxedhero]

It is also worth pointing out the original article also accompanied an implicit threat to take their company to the US if they weren't given a banking licence immediately.

The stuff with the accounts already existed, apparently the regulators found these issues when examining their suitability for the licence (I have read from sources online that there is a very significant issue with revenue recognition, as in a percentage of revenue significantly above 50% couldn't be matched in their systems), but the resignations came after they went to the media and tried to bounce the BoE into giving them a licence (spoiler: what the CFO is quoted as saying it is total bollocks, they aren't close to getting a licence).

The media furore in the UK from execs about insufficient levels of executive pay unfortunately has created the space for opportunism like this.

[tzs]

> The company has a pending application for a UK banking license for the past 28 months; the turnaround time for that in the UK is 12 months

Wow...I'm a bit surprised. We've had a pending application for VAT registration in the UK since sometime in the 1st quarter of 2019. I had assumed that if a government is so short of resources that they can't manage to process applications to collect taxes for them, they would probably also be very slow on applications for financial things that don't directly give them money.

Every time we ask about our VAT application, they just say it is still processing. They told us to collect VAT, but to call it something else like "additional fee", and hold it until they get around to processing the application.

[jlokier]

I did a UK VAT registration in 2020 and it took about a month. I did one back in 2005 or so and it took a similar time. Years is exceptionally slow.

The "additional fee" process is only intended to cover a few months at most. It doesn't work for a long period as your customers can't claim back the amount paid until they receive a replacement invoice formally recordable as VAT, when your registration comes through. If "additional fee" is done for longer, that creates a situation where you end up having to lower your price to business customers who normally don't count VAT in the price because they can quickly reclaim it, but you are still paying VAT on that income (by having to set it aside). That combo is not how VAT is supposed to work.

[tzs]

I wonder if the difference is that you are in the UK? We're not. We're in the US.

Prior to the Brexit implementation we dealt with VAT on sales to EU customers using the VAT MOSS system, with Ireland being the country we were registered with.

[manquer]

4 years seems very high for VAT registration?

I have worked with some corrupt and incompetently bureaucratic global south governments even they wouldn’t take 4 years for a thing like VAT something is terribly wrong with UK.

[exizt88]

I don’t know if average turnaround time applies here, because Revolut is getting a license on top of an already huge business.

But again, all of what you said indicates that Revolut has fucked up. But it doesn’t mean they are doing WireCard levels of fraud, or any fraud at all.

[rchaud]

Then it was an extremely stupid move to rack up a large number of UK customer accounts if you know it will make the licensing process more onerous, and delay the introuction of financial product that are dependent on the license.

Let's be real, they set up shop in Lithuania first because it was an easy way to enter the then-EU member UK market. Their offices are based in London because they weren't going to get unicorn valuations sitting in Vilnius.

[bboygravity]

In this era of bank-runs, 2008 having been can-kicked, a massive regulatory crisis in the US markets (short hedge funds succesfully trying to cellar box banks and other stocks deliberately by shorting with counterfeit stock), the US about to enter hyper-inflation this decade, derrivatives crash incoming, FTX corruption, etc.

I'm NOT going to give Revolut the benefit of the doubt I don't think :p