In a regulatory development, Quickbit Limited, authorized by the Gibraltar Financial Services Commission (GFSC) as a Virtual Asset Arrangement Provider, is facing severe consequences for contraventions of the Proceeds of Crime Act. The GFSC, following a thorough investigation and onsite visit in February 2023, has taken decisive action against Quickbit for various violations in key areas of customer due diligence.

Regulatory Outcome and Impact on Quickbit

The GFSC Anti-Money Laundering and Counter Financing of Terrorism Supervision Team conducted an extensive onsite examination at Quickbit in February 2023. The investigation revealed several regulatory breaches concerning the application of Customer Due Diligence Measures (CDD), timing of verification, Enhanced CDD, Politically Exposed Persons, and Risk Assessment.

Despite the identification of these deficiencies during the onsite visit, Quickbit failed to take adequate remedial measures, leading to an escalation of the regulatory actions against the company.

A Decision Notice has been officially issued by the GFSC, imposing the cancellation of Quickbit's registration under Regulation of the Proceeds of Crime Act. This decisive move by the GFSC underscores the severity of the identified breaches.

The cancellation of registration effectively restricts Quickbit's ability to continue its operations as a Virtual Asset Arrangement Provider. This regulatory action has immediate and far-reaching consequences for Quickbit, impacting its standing in the financial industry and potentially affecting its relationships with clients and stakeholders.

Anticipation and Resolution of Customer Knowledge Deficiencies

In an update, Quickbit announced the completion of the GFSC investigation into its subsidiary. While the investigation has led to the revocation of Quickbit’s local registration in Gibraltar, the company is pleased to report that no fines will be imposed by the GFSC.

This follows Quickbit's earlier disclosure that its subsidiary in Gibraltar was under scrutiny for deficiencies in customer knowledge processes, specifically relating to the local part of operations conducted before the start of 2023. The potential for fines or similar penalties was anticipated, but following the GFSC's decision, such measures will not be implemented.

It is noteworthy that Quickbit has not been actively operating in Gibraltar since the beginning of 2023. Furthermore, in the spring of the same year, the board of the parent company made a strategic decision to close down the business and the subsidiary in Gibraltar, citing a lack of operational and strategic advantages in that jurisdiction. Consequently, the GFSC's decision to revoke the local registration does not impact Quickbit's ongoing operations.

Daniel Sonesson, the CEO of Quickbit, remarked: "The investigation in Gibraltar has consumed a significant amount of resources throughout much of the year and delayed our process of shutting down the subsidiary. I am pleased and relieved with today's decision, which allows us to move forward with full focus. I am also proud of the team that handled the matter with expertise, securing the best possible outcome for the group."