Klarna Bank criticized by FSA for money laundering risks

Klarna Bank AB has faced significant criticism from the Swedish Financial Supervisory Authority (FSA) for insufficient measures against money laundering and terrorist financing, as reported by Dagens Industri. A preliminary assessment by the FSA identified violations of multiple regulations, including general and customer risk assessments and know-your-customer rules. The FSA's heavily redacted letter highlighted failures in at least six provisions of the Money Laundering Act, emphasizing the need for enhanced customer awareness measures for high-risk clients.

This scrutiny arises as Klarna prepares for an initial public offering (IPO) next year, following a 27% revenue increase in the first half of 2024. Klarna declined to comment on how the FSA's evaluation might impact its IPO timeline. The FSA is considering possible interventions against the lender but has not yet made a final decision.

Source: BNN Bloomberg