Fintech Startup Wise’s CEO Comes Under Investigation For Tax Evasion

Wise’s CEO and co-founder Kristo Kaarmann

Fintech startup Wise’s CEO and co-founder Kristo Kaarmann is being investigated over allegations of tax evasion. Authorities allege that the CEO and co-founder of the fintech unicorn owes a tax bill of over £720,000. Kristo Kaarmann has been fined £365,651 by the UK’s government department charged with the onus of collecting taxes – Her Majesty’s Revenue and Customs.

While the UK’s Financial Conduct Authority has refused to make comments on the situation, a Wise spokesperson said that the CEO had submitted his personal tax returns for the 2017/2018 tax year late adding that the CEO had since paid his debts and penalties for late filing.

According to a statement Wise issued on Monday, the FCA has gone ahead to open an investigation and are investigating if the CEO failed to perform his obligations and failed to meet what was expected of him. Wise also added that its board had hired external lawyers to investigate the CEO’s tax violation and that the investigation was concluded in the fourth quarter of 2021 and its findings were submitted to the Financial Conduct Authority.

“After reviewing the matter late last year the Board required that Kristo take remedial actions, including appointing professional tax advisors to ensure his personal tax matters are appropriately managed,” Chairman of Wise’s board David Wells said emphasizing that the company took the CEO’s tax default and FCA probe seriously.

“The Board has also shared details of its own findings, assessment, and actions with the FCA and will cooperate fully with the FCA as and when they require while continuing to support Kristo in his role as CEO,” he added.

CEO Kristo Kaarmann may be forced to step down from his role at Wise as part of the FCA’s probe. The probe could also send him out of the industry if regulators rule that he shouldn’t be in the space.