A British IT businessman has decided to move his business away from Malta after his bank deposits were frozen following the MFSA’s money laundering clampdown on Satabank.
David * told Lovin Malta he started banking with the St Julians’ based bank after his request to Bank of Valletta to reactivate an old account fell on deaf ears.
“I was originally a resident in Malta in the late 2000s and had a bank account with BOV. It was horrible to set up, trying to get bank references from existing banks is near impossible and the whole process took months,” he recounted. “I couldn’t get a response from the BOV when I asked to reactivate my account [after returning to Malta] so I went with Sata. The joining included a video call, passport and address verification, the exact same process every other bank uses. I found them easy to use, their app worked well.”
David only got to know of problems at the bank when he tried to log into the Sata app to pay his staff but was told he was blocked from the system.
“I contacted the MFSA, who sent me a condescending load of drivel basically telling me nothing,” he said. “I then saw a statement saying how it was mostly foreigners affected and local people will be fine. Having substantial connections to the island, I can say that could not be further from the truth. While the account may be held by a foreign person, the people employed in Malta are very much Maltese. While they do not bank there, they are paid from said accounts. In our case we had less than €10,000 in our account, and I’m mystified why accounts with smaller balances could not have been exempted [from the asset freeze].”
“As for the future, I’m going up move all business away from Malta. It was once a friendly jurisdiction for legitimate tech companies but the regulator’s handling of this and other affairs has been clumsy and heavy-handed. With the additional competition from Eastern Europe for fintech I can’t see Malta realistically competing in the near term.”
Although the MFSA has assured Satabank clients that their money is safe, it also informed them it would likely take “several weeks” before they are able to access it. It added that the release of funds will be subject to unspecified controls and checks and that Satabank customers will have to provide details of another bank account in an EU/EEA jurisdiction opened in the same name as their Satabank accounts.
And David is just one of hundreds, if not thousands, of depositors who have been left in limbo in the wake of the MFSA’s clampdown.
A British financial services practitioner said that she was planning to move to Malta and that a leading Maltese corporate services firm had set up a Satabank account to act as her retirement fund.
Quite frankly, doing business would have to be easier and more trustworthy in Nigeria
“This was my retirement fund and I now cannot access my accounts,” she said. “To say I am worried is an understatement. This shambles has driven a stake through the heart of Malta’s reputation as a credible place to do business.”
“I am also awaiting my tax rebate, and waiting, and waiting. However, the bank details given for the tax rebate are Satabank’s and I am due to make my next tax payment at the end of this month. So not only will I be expected to pay more tax, while waiting a year or more for the last one, but I cannot access my funds to pay the tax bill. Nor do I have any confidence that Malta will actually pay me back the tax due – I have no trust left. Quite frankly, doing business would have to be easier and more trustworthy in Nigeria.”
Satabank co-owner Christo Giorgiev with Prime Minister Joseph Muscat
The saga has also impacted customers of LeoPay, a London-based fintech company which provides International money transfers and is owned by Satabank’s co-owner Christo Giorgiev. Following the MFSA’s clampdown on Satabank, a number of LeoPay customers found out that they could no longer make payments or that their accounts had been closed without warning.
“My client transferred a payment to my LeoPay account earlier this month but was told his money would be credited back to the sender’s account due to problems at SEPA (Single Euro Payments Area) and SWIFT transfers of Leopay,” a user told this website. “However, he never received his money back and [Leopay] unbelievably refuses to respond to my emails on this issue. The Maltese government must also be more serious and careful as they are ruining many people’s lives and businesses indirectly at the moment just to find some criminals. This should not be the way to do it.”
LeoPay confirmed that some of its clients’ deposits are held with Satabank but said this amounts to less than 1% of its customer base.
“We would like to apologise to those impacted customers and reassure them that we are working hard to rectify the situation. We would like to reiterate that there is no liquidity issue at LeoPay.”
*David’s surname has been left out at his request