QPay Europe Limited, a UK-registered merchant services provider claiming to be a fintech startup specializing in due diligence and underwriting, has agreed to forfeit £2 million following court action initiated by the UK’s Financial Conduct Authority (FCA). The order was granted under the Proceeds of Crime Act, with District Judge Cieciora issuing the ruling at Westminster Magistrates’ Court.
The funds were initially frozen during urgent legal proceedings brought by the FCA in October and December 2020. According to the FCA, the money is suspected to be connected to the $150 million Allied Wallet bank fraud scheme indicted in the United States. Though the FCA did not claim that QPay was directly involved in the U.S. criminal conspiracy, the agency raised concerns about the origin and flow of funds tied to the firm.
Background to the Case
U.S. prosecutors have accused executives at Allied Wallet Inc., a Los Angeles-based payment processor, of misrepresenting merchant activities to illegally provide payment processing services for high-risk clients. The FCA’s investigation found that QPay had received £2 million from Fintech International Q Software WLL, allegedly under the guise of an investment.
However, subsequent fund movements raised red flags. The FCA observed that QPay transferred the money across several international bank accounts, with no clear link to genuine commercial activity. The transactions prompted regulatory concern, particularly after QPay submitted an application for FCA authorization in March 2020 — a request it later withdrew.
Outcome and Implications
With the court’s consent order now in effect, the £2 million held by QPay will be seized and transferred to the UK government. The funds will be used to support ongoing efforts to combat financial crime.
The FCA emphasized that it will continue to thoroughly assess all applications for regulatory approval, ensuring firms meet stringent standards of both competence and integrity.