Swedish financial technology giant Klarna has been slapped with a substantial £36 million fine by Sweden’s financial watchdog for failing to comply with anti-money laundering regulations.
The Swedish Financial Supervisory Authority (FI) discovered that Klarna Bank had not properly assessed how its products and services could potentially be exploited for money laundering or terrorist financing activities. The investigation revealed significant gaps in the company’s implementation of necessary due diligence measures.
Daniel Barr, FI’s director-general, emphasised the severity of the findings, stating that Klarna’s failure to maintain proper risk assessment protocols and due diligence procedures warranted intervention. The penalty comes as part of a broader crackdown on Swedish banking institutions, with all major banks facing similar regulatory actions.
The buy now, pay later provider maintains that the fine stems from interpretational differences regarding regulations rather than actual instances of money laundering. The company highlighted the complexity of navigating industry regulations and noted its position as one of the last major Swedish banks to face such scrutiny.
This regulatory setback arrives at a crucial time for Klarna, which is contemplating a US public listing in early 2025, targeting a valuation of up to $20 billion. The company’s value has experienced a dramatic decline from its peak of $46 billion in 2021 to $6.7 billion in its most recent funding round.
Despite returning to profitability with a £15.4 million net profit in the third quarter of 2024, Klarna recorded an overall net loss of £8.3 million for the first nine months of the year. The company’s financial performance remains under close scrutiny as it navigates increasing regulatory oversight in the evolving buy now, pay later sector.
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