Key points:
- Spreadex has been fined £2m ($2.5m) following regulatory failings identified by the Gambling Commission
- A third-party audit has been ordered to assess the effectiveness of its current compliance measures
The Gambling Commission has fined Spreadex £2m following the identification of anti-money laundering and social responsibility failings.
The failings were uncovered during a compliance assessment in July 2023 and relate to the company’s activities between September 2022 and November 2023.
The Commission found that Spreadex’s money laundering and terrorist financing risk assessment did not adequately consider key factors including customer, product and geographic risks.
It was also found that the company placed undue reliance on self-declared financial information from customers without requesting proper evidence.
In one case, a customer deposited around £64,000 over a short period without any source of funds check being carried out. That customer lost £50,000 within a month.
Further concerns included repeated customer checks which failed to escalate appropriately as risk increased, and social responsibility failings such as a lack of effective interaction with a customer who reached a daily deposit cap of £3,300 on 12 occasions in 14 days. The company’s response was limited to four automated messages and did not involve any human engagement.
Good to know: Spreadex is now required to commission a third-party audit to assess whether its revised anti-money laundering and safer gambling procedures are effective
This is the second time enforcement action has been taken against Spreadex. In 2022, the operator paid a £1.4m regulatory settlement for similar issues.
John Pierce, Commission Director of Enforcement, said: “The conclusion of this case marks the second time Spreadex Limited has been subject to enforcement action.
"Its failure to uphold anti-money laundering standards, delays in necessary interventions, and weaknesses in social responsibility measures were unacceptable."
