Money transmitter EcoRemit shut down

The Financial Services Agency, through the Kanto Financial Bureau, has issued a business suspension order for all operations related to the EcoRemit money transfer business from October 11, 2024 to April 10, 2025. Given the past history detailed in the suspension order, it is unlikely that the business will get off the ground again. Here are some of the highlights:

• The management team’s awareness and efforts regarding compliance with laws and regulations were insufficient, and the company was found to have been grossly negligent in failing to fully recognize the illegality of the violation itself and repeatedly and continuously conducting illegal remittances from February 2023 to the end of January 2024.
• Between February 2023 and the end of January 2024, the company committed serious violations of the Payment Services Act, including approximately 270 remittances of over 1 million yen each without obtaining approval as a Type 1 Fund Transfer Business and failing to fulfill its obligation to secure a performance bond for the remittance amount.
• Since its registration in February 2020, the company has not properly established a money laundering/terrorist financing risk management system based on the guidelines. As a result, it has been found that measures related to matters required by the guidelines have not been properly implemented, such as risk identification and assessment, transaction monitoring and filtering, consideration of the applicability of suspicious transaction reports, establishment of various regulations, and establishment of second and third line systems.
• The company has not properly responded to the request made by the Financial Services Agency in its April 28, 2021 “Deadline for the Establishment of a System for Measures against Money Laundering and Terrorist Financing,” that “matters required by the guidelines be addressed and a system be established by the end of March 2024.”

Overall, especially given the last point, it strikes us with a certain bewilderment that such a company would be given more than four years to operate, and more than three years since the initial “Deadline” letter to operate what is very clearly a non-compliant business.

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