Wise Accuses Former Brazil Partner of Smear Campaign
Wise Disputes Fraud Allegations by Former Brazilian Banking Partner
Wise, the financial technology company headquartered in London known for its international money transfer services, has refuted claims of fraud leveled by its previous banking partner in Brazil. The accusations, which Wise deems “false and unfounded,” come amidst reports of a potential Initial Public Offering (IPO) for the company.
Escalating Dispute Following License Approval
The conflict between MS Bank of Brazil and Wise intensified after Wise obtained its own foreign exchange (FX) broker license from Brazil’s Central Bank in January. This development signaled the impending end of their partnership. Subsequently, MS Bank abruptly terminated its contract with Wise in February.
Furthermore, MS Bank announced the launch of its own money transfer service, named CloudBreak, directly to customers.
Temporary Service Suspension and Reinstatement
The termination of the banking partnership initially forced Wise to temporarily halt transfers through the Brazil corridor. However, Wise successfully reopened its Brazilian real (BRL) to U.S. dollar (USD) transfer route on March 12th, operating under its newly acquired license.
It was following this reinstatement that the situation became contentious.
Allegations of Fraud and Wise’s Response
MS Bank disseminated allegations of fraudulent activity by Wise through customer accounts, initially via an email to customers and later through a YouTube video and website publication. The claims centered on a perceived inconsistency in transaction recording between customer accounts and the Brazilian Central Bank’s records.
In response, Wise published a detailed blog post providing a comprehensive explanation of the transaction recording discrepancy. The company firmly denied any wrongdoing and characterized MS Bank’s actions as a deliberate “defamation campaign.”
Wise Denies Wrongdoing and Pursues Legal Action
A statement released by Wise to TechCrunch asserts that the accusations are strategically timed to coincide with the launch of MS Bank’s competing product. The company emphasizes that it is unaware of any investigations or accusations from regulatory bodies, either in Brazil or internationally.
Wise maintains its confidence in the security of customer data and funds, and has indicated it is taking legal action to address the matter.
“We are certain that we are not responsible for any fraudulent or improper activity using customer data and/or funds,” Wise stated.
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