Overseas clients of Malta’s Satabank and UK-based e-wallet provider Leopay are unable to transfer their funds outside of the EU after the Maltese regulator took action against the Sata Group.
Customers of Leopay in Brazil also had their accounts closed on 22 October without warning, according to complaints on its Facebook page. It is not known at this stage if it is only Brazil-based customers who are affected.
It now appears that customers of Leopay were informed of the regulatory action, while Satabank customers who did not use the service were left in the dark. Both companies were founded by the same person, with Leopay reportedly using Satabank’s licence.
An e-wallet, sometimes known as a digital wallet, is a secure online system that enables users to make transactions and purchases, electronically.
The move followed the Malta Financial Services Authority (MFSA) issuing an administrative measure against Satabank on 20 October, freezing all of its accounts.
Three days later, customers were granted read-only access to their accounts, but were unable to make transfers, withdrawals or close them.
Open to foreigners
Several customers of Satabank told local newspaper the Times of Malta that the situation has resulted in financial losses due to their inability to pay and get paid by their clients.
They told the newspaper that Satabank is the only Maltese bank willing to let foreigners open an account on the island.
The move could mean that all clients, including EU and non-EU expats, will be unable to access their funds held by the bank for the foreseeable future.
The MFSA has appointed Ernst & Young to manage the bank’s assets in the best interest of the clients.
Customers complained to the Times of Malta about not being able to make any transactions and that Satabank did not warn any of them about the MFSA measure.
Julie Papadaki, who has been a client of Satabank for a year after moving to Malta from Greece two years ago, found out about her account while grocery shopping.
She told International Adviser: “I was in the supermarket and my card was not working! I had only €20 cash, and have to feed myself with this until I receive my next salary.
“I cannot explain the stress and psychological consequences. All my savings after two years of hard work in this country disappeared! [On 24 October] we were notified not to expect immediate access to our funds.”
Leopay clients got a tip off
However, according to the Facebook group ‘Victims of Sata bank’, some Satabank customers were sent an email informing them of the upcoming regulatory action and inviting them to provide a copy of their passport and Iban and Bic code in order to transfer their funds.
It appears that clients who received the email were also customers of Leopay (formerly Leupay).
Both Satabank and Leopay were co-founded by Christo Georgiev, a Bulgarian entrepreneur. According to industry website Fintech in Malta, Leopay’s cards and banking services were running on Satabank’s licence.
Prior to 24 October, Leopay’s website listed the ‘Legal Agreement for LeoPay’ and its ‘Account by Satabank’, which have now been removed.
International Adviser contacted the MFSA to verify that Leopay was using Satabank’s licence but did not receive a comment in time for publication.
On 22 October, Leopay suddenly closed all its Brazilian accounts, only allowing EU customers to use its services – even though the company operates in several other non-EU countries; such as Guadeloupe, Martinique, Saint Martin, French Guiana, Mayotte and Réunion, according to its website.
A spokesperson for Leopay said: “We can confirm a limited number of Leopay customers are affected by an issue which means they cannot transfer funds from their accounts. This is because the deposits in these accounts, which total less than 1% of Leopay’s customer base, are held with Satabank.
“The remaining 99% of customers are unaffected by this issue. We would like to apologise to those impacted customers and reassure them that we are working hard to rectify the situation.
“The customers affected can see their accurate account balances and will be able to access funds as normal as soon as possible. We are in ongoing dialogue with the Maltese regulator and are assisting them wherever possible.
“We would like to reiterate to these customers that there is no liquidity issue at Leopay and we will communicate with them when we have additional information.”
The MFSA announced on 24 October that deposits will be returned to Satabank’s customers.
E-wallet services have been under fire recently, with the Hong Kong Monetary Authority suspending these type of services following fraud reports of approximately HKD180,000 (£17,900, $22,950 €20,170) being stolen from customers.