The Financial Intelligence Analysis Unit has fined Satabank a reported €3.5 million for various regulatory breaches.
The bank had been under the control of auditors from EY after the Malta Financial Services Authority ordered it to cease all business activity, and was the subject of a joint inspection by both the MFSA and FIAU over shortcomings in the bank’s anti-money laundering procedures.
The police have since been involved, investigating what could be billions in euros which passed through the bank’s payment channels.
All 12,000 of Satabank’s accounts were frozen by the MFSA, with controlled releases effected by EY.
Sources in the financial regulator told MaltaToday that billions of euros passed through the bank in high-risk transactions, citing lax controls and lack of due diligence controls on the transactions.
This was the first time in Maltese banking history that the MFSA, in coordination with the Central Bank of Malta and the FIAU, had taken such action against a retail and commercial bank.
The joint inspection is combing through each account to ensure that any questionable funds do not leave the Paceville bank.
Satabank offered an innovative online payment channel which allowed small peer-to-peer payments to be made. Prior to setting up in Malta, Satabank’s Bulgarian co-owner Christo Georgiev ran an e-money business in Luxembourg.
A self-described pioneer of innovative payment solutions who has worked in the fintech sector since 2000, according to a biography on one of his company’s websites, Georgiev also owns Bulgarian iCard AD, and the Liechtenstein-based myPos AG.
Satabank has protested exorbitant rates it was being charged by the “competent persons” appointed to take control of its bank, in a formal protest lodged with the Malta Financial Services Tribunal. Satabank said it was paying members of the international team up to €689 an hour. “In the context of a small bank that is a Maltese-licensed and regulated credit institution, the above rates are exorbitant and unreasonable. [They] are clearly not in the interest of the bank, nor of its depositors, employees and shareholders.
“If such rates were to be maintained unabated, the fees of the competent person will inevitably deplete the bank’s capital…”