UK fintech Stenn collapsed into administration after a reference to the company in a US criminal indictment about a Russian money laundering scheme prompted its lenders to begin probing potentially suspicious transactions, according to the Financial Times, citing people familiar with the matter.
Stenn had two of its UK units placed into administration last week after an application to London’s High Court from HSBC Innovation Bank, one of its lenders.
HSBC began probing potentially suspicious transactions at the London-based start-up earlier this year after US authorities unsealed criminal indictments in a money laundering case that included passing references to Stenn and its Russian founder and chief executive Greg Karpovsky.
Founded in 2015, Stenn's technology platform used big data and tailored algorithms to analyse credit, fraud and compliance risks on behalf of lenders, promising firms access to capital within 48 hours.
The firm received an investment from Barclays in 2020 and agreed a 2022 partnership with Citigroup after securing a $50 million equity funding round with US investor Centerbridge, at a $900 million valuation.
Questions are now being asked about the due dilligence conducted by these firms, particularly considering that a former auditor of the fintech had resigned over concerns about some transactions and Karpovsky was previously involved in a Russian invoice finance company that later collapsed amid fraud allegations.
Karpovsky has vigorously denied allegations about any wrong doings in connection with Stenn.