The end of a relaxed regulatory regime
In the last five years, Estonia and Lithuania have developed into a paradise for scammers and FinTechs focused on high-risk and illegal clients. Insider knew that the two EU member states took a rather relaxed approach when granting licenses for financial services. Many scam companies in the crypto sector have, therefore (officially) registered their operating entities in Estonia for their rather worthless crypto licenses.
In Lithuania, various payment processors and e-money institutions (EMI) have settled. FinTelegram has in many reports pointed out that these “dark” FinTechs in Estonia and Lithuania support scams with their services and thus enable or operate money laundering. However, until recently this did not seem to bother regulators in Northeast Europe. That has changed. Dramatically!
Bruc Bond marks the beginning of a new regulatory era
On 22 April 2020, the Bank of Lithuania (LB) revoked the license of Bruc Bond UAB (doing business as “Brüc Bond“). Until a few months ago, the company went by the name Moneta International UAB. LB’s announcement in this regard was exceptional and should also be seen as a strong signal to market participants. The message is that the time of relaxed access to the supervision of FinTechs is over. Many – including our FinTelegram team – were surprised that it was the Bank of Lithuania, of all banks, that sent out this clear signal.
Bruc Bond should, according to the LB’s order, have announced the revocation of its license publicly and in detail. As of now (April 23, 2020), no notification has yet been posted on the company’s website (www.brucbond.com). The disgraced FinTech is beneficially owned by the Israeli payment veterans and self-proclaimed FinTech Guru (see screenshot left) Eyal Nachum and Tamir Zoltovski. They are actually controlling a network of licensed and unlicensed payment processors such as Payobin (Payotech Ltd) and the licensed Lithuanian International Fintech UAB.
Bruc Bond is only one of several financial service providers who, according to the FinTelegram report, have enriched themselves by supporting scams and related money laundering. We, therefore, hope that Bruc Bond marks only the beginning of a much-needed clean-up of the FinTech market from its evil players.