The Swedish Financial Supervisory Authority has criticised Klarna over its anti-money laundering (AML) and counter terrorist financing measures.
According to Swedish news outlet Dagens Industri, the authority held a preliminary review into Klarna’s AML and counter terrorist financing protocols, finding that the Buy Now, Pay Later (BNPL) giant had violated several regulations.
This was conducted last July after a letter was filed and sent to the company’s CEO Sebastian Siematkowski.
Dagens Industri obtained the redacted letter to reveal that Klarna was criticised for its measures in place and had in fact came in breach of at least six different provisions of Sweden’s Money Laundering Act.
Some of the provisions Klarna had failed to meet, according to the Swedish Financial Supervisory Authority, were general risk assessment, risk assessment of customers and know your customer (KYC) guidelines.
The report also highlighted vulnerabilities relating to customers who may be associated with a high risk of money laundering, finding that measures to identify these potentially risky customers were not up to scratch.
A spokesperson for the Swedish Financial Supervisory Authority, commented: “We will communicate our decision when we have made one.”
The Swedish authority will reportedly examine what action it should take against Klarna if it concludes that enforcement action is necessary, according to Dagens Industri.
The news comes at a particularly important time for Klarna as it is gearing up for a potential initial public offering (IPO) in the US to enact on its growing customer base in the country.
It remains to be seen how much of an impact any potential regulatory action may affect this ambition.