Electronic money institution Wittix, UAB and its CEO fined for inadequate protection of customer funds
The Bank of Lithuania imposed a fine of €28 thousand on Wittix, UAB and a fine of €10 thousand on its head of administration for non-compliance with the requirements of the Republic of Lithuania Law on Electronic Money and Electronic Money Institutions and the Republic of Lithuania Law on Payment Institutions.
The Bank of Lithuania conducted an investigation and ascertained that, in the period of July to October 2019, Wittix, UAB held all customer funds in the accounts opened by another legal entity that were not meant for holding customer funds. Since the institution provided payment services through an intermediary, it had to inform the Bank of Lithuania thereof, but failed to do so.
In his own turn, the head of administration not only failed to ensure adequate functioning of the internal control system and appropriate prevention of risks, but also took risky decisions, which did not comply with the requirements of legal acts and posed a threat to security of customer funds.
These actions resulted in the company’s loss of €31.6 thousand, since customer funds held in one of the accounts were lost and Wittix, UAB had to compensate them from its own funds.
After considering all the circumstances, the Bank of Lithuania imposed a fine of €28 thousand on Wittix, UAB and a fine of €10 thousand on its head of administration Mr Hanan Assis.
In addition to the above, the company provided to the Bank of Lithuania incorrect information on the balances of customer funds held in credit institutions on 30 September 2019. An enforcement measure was imposed for this as well – a public announcement about the breach was made.
The Bank of Lithuania issued an electronic money institution licence to Wittix, UAB on 30 May 2019. The company provides payment services as well as issues, distributes and redeems electronic money. Income from its activities amounted to €108 thousand in 2019 and €391 thousand in Q2 2020. Wittix, UAB falls among the top thirty electronic money and payment institutions according to the income earned.
Information on enforcement measures applied by the Bank of Lithuania, complaints regarding the applied enforcement measures, and settlement results is available here.