German smartphone bank N26 has been fined 4.25 million euros (4.96 million dollars) by financial regulators after not reporting possible money laundering cases.
The financial supervisory authority Bafin had accused N26 of not investigating suspicious cases decisively enough.
N26 admitted on Wednesday that it had filed “less than 50 suspicious money laundering reports” with Bafin late in 2019 and 2020.
The fine of 4.25 million euros was paid on time in June, the bank announced late on Tuesday.
The conclusion of the proceedings means that N26 has cleared a major potential stumbling block for its next financing round.
According to financial sources, the company wants to raise several hundred million dollars for a further expansion.
The company stressed that N26 had “fully implemented” all measures required by Bafin to improve timely reporting of suspicious activities.
N26 belongs to the new so-called smartphone banks, which advertise a full range of services via a mobile banking app.
N26 has 7 million customers. Investors in N26 include the German insurance group Allianz, the Singapore sovereign wealth fund GIC, the Chinese internet giant Tencent, Earlybird and the German-American investor Peter Thiel.
A new round of financing could increase the valuation of the start-up to an estimated almost 10 billion euros.