Considering both senior politicians in Lithuania and Luxembourg have raised formal concerns about Revolut's bid for a bank licence, specifically because of the CEO's alleged Kremlin ties, I'm willing to assume there's some substance to that concern.

Them not having the license also means that the deposits aren't insured the way they normally are in EU, meaning you get nothing if things go wrong.

We use Revolut around the office to split bills for lunches, etc, but I wouldn't keep more than few bucks in there.

edit: They have a banking license but current account customers now still get an e-money account only - quite confusing state. With an e-money account, the client money is supposed to be in a separate account and if they go under, you still get your money. (FCA regulates all this)

They have a banking license from Lithuania (but customers are not switched to it) which might be revoked by Lithuania and they are trying for another license in Ireland.

Thanks to comment below - edited this make more sense.

Revolut received its banking license from Lithuania in December 2018, but hasn't switched its customers over yet. After the family connection with Gazprom became public, Lithuania started considering revoking the license, and Revolut applied for another one in Ireland. It's not clear now, when and which banking license Revolut will start using. It's worth pointing out, though, that Revolut already has more customers than there are tax payers in Lithuania[1].

[1] https://www.theguardian.com/money/2018/dec/22/lithuania-icel...

As an Irish person who watched the crapshoot of our banking regulation in 2000s I can assure you that this does not fill me with confidence.

thanks, you are right, I have edited my original response (which itself is quite confusing now) - the Revolut state of regulation quiet confusing - better to stick with Monzo in UK/N26 in EU.

They have a UK bank license now, so deposits are covered up to EUR 100k

They're only covered against bankruptcy though - if someone steals your phone and drains your account, you're SOL.

There’s a YC company called Ysplit which solves this exact problem. I highly recommend it. ysplit.com

Revolut seems overkill for that, maybe try Splitwise?

Venmo seems to be the standard here in the US. Is it not as common overseas?

lol no it assumes a US account. it's not even listed in the app stores here. people mostly use bank transfers for everything since it's free and fast

Haha, yeah, US banking is pretty awful in terms of ease-of-use.

I don't use Venmo myself - I'm at a point where I'd rather just pick up the check that try to split it (using any method). And let me friends pick up the next meal.

I tend to find that Venmo is a bit redundant in the UK - feature-wise, I'm not sure that it does anything that the standard bank mobile apps can't do? (There's a standard person-to-person via mobile number payments system that most banks support & integrate into their apps (https://en.wikipedia.org/wiki/Paym)).

That's nice. I wish US banks would do something like that, so we don't have to rely on 3rd party apps. But, they couldn't even roll out chip & PIN properly.

Gazprom ties, AML system randomly going offline, regulated by Lithuania...this looks more like a money-laundering scheme than a bank.

Why does being regulated by Lithuania make it look it like a money-laundering scheme?

I’m not certain as to the original post’s implication, but the multi-billion-dollar Russian “Laundromat” schemes that have come to light over the past few years fed through Baltic banks, including at least one in Lithuania. I’d think, though, that since these came to light there would be added scrutiny and it wouldn’t be an ideal place for further nefarious activity.

> through Baltic banks, including at least one in Lithuania

Just to clarify: The Russian Laundromat mostly relied on the banks from Latvia and Estonia[1], the two EU countries with the largest Russian population. The only banks which participated in the scheme from Lithuania – Danske and Nordea – were actually Scandinavian, and have either left the country (Danske), or merged with others (Nordea) afterwards.

[1] https://www.occrp.org/assets/laundromat/BarChartBank-big.png

I was thinking about the recently revealed 'Troika Laundromat'–smaller than the Russian Laundromat scheme but still a $5B operation–which involved the Lithuanian Ukio Bankas: https://www.occrp.org/en/troikalaundromat/the-troika-laundro...

This one was really a Lithuanian bank, even though founded by a person who was born in Russia, and who escaped to Russia when the bank collapsed in 2013. There are none of such banks left in the country anymore, and people are very concerned about any possible Revolut's connections to Russia.

> Why does being regulated by Lithuania make it look it like a money-laundering scheme?

It doesn't raise issues per se. But Lithuania has a sizable Russian population [1]. It's also a small country.

The latter means it has less experience supervising novel and complex financial systems. It also makes its regulators easier to unduly influence, either through bribery or threats (e.g. Revolut failing would probably deplete Lithuania's national deposit system).

[1] https://en.wikipedia.org/wiki/Russians_in_Lithuania

A Lithuanian here.

> But Lithuania has a sizable Russian population [1]. It's also a small country.

The Russian population (5%) is a tiny minority here, not represented by any political party in the parlament. It's much bigger (25%) in Latvia and Estonia, as Russians tend to live in the cities near the Russian border[1].

> The latter means it has less experience supervising novel and complex financial systems. It also makes its regulators easier to unduly influence, either through bribery or threats

In this case, there is a common view in Lithuania, that as a tiny economy we should focus on IT sector and follow Estonia's example, trying to be the most modern and innovative state in the EU.

Therefore, there is an entire goverment program for attracting and supporting fintech companies[2], hoping that they will open offices in Lithuania and employ recent graduates, preventing them from fleeing to Western Europe for better job opportunities.

Of course, it makes no financial sense to give a banking license to a foreign startup for such a small economy, but Revolut is extremely popular in Lithuania and the general population sees it as an alternative to Scandinavian banks which have occupied the local market.

As a result, those policitians who have tried to oppose giving the license to Revolut were publicly attacked from all sides as "working on behalf of Scandinavian banks".

[1] https://en.wikipedia.org/wiki/Russians_in_the_Baltic_states

[2] https://www.lb.lt/en/newcomer-programme

> Those policitians who tried to oppose giving the license to Revolut were publicly attacked from all sides as "working on behalf of Scandinavian banks"

I rest my case. That such financial regulation is being politically decided gives Revolut more leeway in Lithuania than it would have in e.g. the U.K.

> That such financial regulation is being politically decided

It's not being politically decided, but multiple senior members of the parlament in the committee on Budget and Finance have publicly expressed their concerns.

I agree that there is a lot of general inexperience in the entire system, and I don't believe that Lithuania would be able to regulate Revolut properly, as it's based in the UK.

The point was, that Revolut was more than welcome in Lithuania, and they didn't need to try to influence anyone. The politicians and regulators were even proud that one of the biggest fintech startups in Europe chose to set foot here.

They also saw that N26 was successfully granted a license in Germany, Monzo in the UK, and Bunq in Netherlands. Therefore, it wasn't seen as such a big risk.

Good point. I believe there are EU directives in place which mandate that if an institution is authorised in one member state it can operate in any other state

It's HQed in London, so not being regulated there raises questions.

I would guess that regulation in the UK is better, but I'm not really up on my Eastern European/pan European banking regulation to definitively say.

Does it? It seems logical, thinking about Brexit.

Brexit would also be an argument against HQing there too though...

The way I understand it, not really. Financial services seem to operate crossborder just OK, while the licenses are not cross border (I mean cross EU border).

> it got it's money from DST Global

So does Facebook, DoorDash, FlipKart and hundred+ other Silicon Valley companies. Revolut also has money from Seedcamp, Balderton, Index and tons of other VCs.

> Revolut is Russian owned and Russian managed pseudo-bank

Since when being a Russian is a crime? Besides if a company is London based it is regulated by UK authorities.

You make it sound like the guy being Russian, DST being Russian (and allegedly having "ties" to Kremlin) is somewhat a red flag. I would like to hear more on the reasoning behind how all that is negative?

Don't Silicon Valley CEOs have ties to White House? Should I not use their products? :)

> I would like to hear more on the reasoning behind how all that is negative?

There is outsized demand for money laundering from Russia, in large part owing to its endemic and unchecked corruption. This is why most recent European money laundering scandals have involved Russian money [1][2][3].

So when you see an AML deficient operation with multiple Russian ties based out of Lithuania, it raises legitimate questions.

[1] https://www.reuters.com/article/uk-danske-bank-eu-regulator/...

[2] https://www.cnbc.com/2019/04/18/deutsche-bank-shares-slip-am...

[3] https://www.insurancejournal.com/news/international/2019/03/...

We have unchecked corruption from the 2nd most powerful politician in the country, no one cares

https://www.nytimes.com/2019/06/02/us/politics/elaine-chao-c...

> We have unchecked corruption from the 2nd most powerful politician in the country

Chao is being investigated by the House [1]. Worst case, we’re talking single-digit millions of suspected malfeasance versus billions in Russia of cut-and-dry graft.

And most importantly, a wrong here doesn’t excuse a wrong there.

[1] https://www.politico.com/story/2019/06/24/house-chao-rules-t...

I thought that she had steered some $78,000,000 in Federal projects to her husband's state and then there were also some questions about the business interests of her family members in China[0]. Also Deripaska[1] just announced he's funding an aluminum plant in Mitch McConnell's state so I suppose it does involve billions in Russian graft. [0]https://www.vanityfair.com/news/2019/06/elaine-chao-china-tr... [1]https://www.cnn.com/2019/04/15/business/rusal-russia-kentuck...

Interestingly, all the banks in your sources involved in money laundering of "Russian money" are big non-Russian (Dutch, German, Estonian, UK, Swedish, French and so on) banks.

> all the banks in your sources involved in money laundering of "Russian money" are big non-Russian (Dutch, German, Estonian, UK, Swedish, French and so on) banks

And Revolut is a non-Russian service. Hence the comparison.

(Money laundering has three steps [1]. Dirty Russian money is typically placed with Russian banks. It is then layered between Russian and non-Russian banks before being integrated by a non-Russian bank, thereby masking its origins. Given the amount of dirty money flowing out of Russia, a Russian account tends to gather more scrutiny than e.g. a Danish one in the same way a Colombian account garners more scrutiny than a Miami one.)

[1] https://en.m.wikipedia.org/wiki/Money_laundering

financial services company accused of money laundering with ties to russian oligarchs in London is a little bit different from minority stake in a large american corporation, or even the American government, which at least as of today is still a liberal democracy.

I don’t think the problem is that it has ties to a political entity.

The problem is that that entity is a de-facto dictatorship that is well known for being corrupt.

The fact that CEOs father works as a deputy executive in a government owned company qualifies does not qualify as "ties," in any meaningful way.

Most shareholders and the regulator in control are western based and run by people whose parents aren't employed in Russia's public sector, as far as I know.

Show me a government that's not known to be corrupt.

> Meaning, despite their London HQ, Revolut is Russian owned and Russian managed pseudo-bank. Giving them more money might not be great idea.

Giving any Russian oligarchs more money is always a bad idea.