FCA Halts Activity At E-Money Issuer

October 9, 2023
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E-money issuer Nvayo has said it is working with the UK regulator to resolve concerns, as it carries out severely restricted activity.

E-money issuer Nvayo has said it is working with the UK regulator to resolve concerns, as it carries out severely restricted activity.

Nvayo, an e-money issuer providing financial services in multiple currencies to members of concierge and lifestyle services, has announced that “following recent discussions, we are required by the FCA to suspend all activities in relation to Nvayo’s electronic money authorisation”. 

“This means that at this time, Nvayo cannot accept new customers, or accept any form of payment to load on to customer wallets or prepaid cards,” the company has said. 

Action taken by the regulator also means that Nvayo prepaid cards will no longer work at merchants or ATMs. 

“At this time, you cannot make any payments to your own bank account or to the account of a third party,” Nvayo told its customers. 

The issuer has insisted that customers’ money remains safely held in a UK bank, in accordance with the FCA’s safeguarding requirements, and stated “Nvayo is working with the FCA to resolve [its] concerns and hopes to find a solution that will allow activities to restart.”

Nvayo, which was set up in 2008 and is powered by Mastercard, and says that payment cards issued by the company are accepted globally.

The FCA declined to comment on an individual firm when approached; however, on the regulator’s website it appears that action was first taken on August 8, with the firm expected to confirm in written confirmation to the watchdog that it is in full compliance with the restrictions by 4pm on August 15. 

The FCA also told Nvayo to secure and preserve all records and/or information, physical or electronic, relating to e-money services from its systems in their original form, or in a copy proved to be identical to the source material. 

“These must be retained in a form and at a location within the United Kingdom, to be notified to the Authority in writing by 4pm 15 August, 2023, such that they can be provided to the Authority, or to a person named by the Authority, promptly on its request,” the FCA webpage states. 

The FCA’s decision to take action could be related to the arrest of Christopher Scanlon in the US, who was the president, chief executive officer and founder of the Aurae Lifestyle and Club Swann, brands to which Nvayo provides services.

Scanlon, who is originally from the US but residing in the UK, was charged by complaint with one count of conspiring to control and own an unlicensed money-transmitting business in May this year. 

From as early as 2015 through 2019, he controlled a series of legal entities – PMA Media Group Inc.; AU Card LLC; AU Card Ltd, and Nvayo Ltd – which US prosecutors say are collectively known as the “AU Entities”. 

Scanlon operated these entities as a money-transmitting business to provide fiat and cryptocurrency financial services to customers of Aurae Lifestyle. He also served as a customer service representative for several high-net-worth Aurae Lifestyle customers. 

US prosecutors allege that he often communicated with customers about financial transactions using encrypted messaging applications and directed the AU Entities to conduct financial transactions for customers through US-based banks and cryptocurrency companies. 

Scanlon operated Aurae Lifestyle during this time without appropriately registering as a money transmitting business with the Financial Crimes Enforcement Network (FinCen).

The conspiracy count carries a maximum term of five years imprisonment, and/or a fine of up to $250,000 or twice the pecuniary gain to the defendant or loss to the victims (whichever is greatest).

Nvayo Ltd and Mastercard did not respond to a request to comment at the time of publishing. 

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