Lawsuit and customer accusations plague fintech firm WB21
The saga of money transfer service WB21 standing accused of aiding and abetting fraud is an unrelenting tale of comments, anger and a civil lawsuit.
As reported last month, the US Securities and Exchange Commission (SEC) revealed a civil lawsuit against Wintercap S.A., Roger Knox, Michael Gastauer and others, accusing WB21 N.A. Inc. of aiding and abetting its client Wintercap`s fraudulent sale of $165 million worth of shares in microcap stocks using the WB21 platform. WB21 and Mr Gastauer deny these allegations and deny any wrongdoings. The full document can be found on the SEC website here (PDF file).
The SEC says that WB21, and its tech for international payments, was used by Wintercap to circumvent regulations designed to disguise the clients’ identities. The SEC also says that Gastauer “repeatedly lied to banks” and made a series of false claims in dealing with various organisations. In response to the SEC allegations, WB21said “WB21 and Mr Gastauer deny the allegations and any wrongdoing. The SEC accuses Mr Knox and Wintercap S.A. of securities fraud and other offences. Mr Gastauer has not been accused of fraud. There are no criminal proceedings against WB21 and/or Mr Gastauer”.
On its website, WB21 calls itself a digital bank and offers account opening for 180 countries in 28 currencies. Its last tweet was yesterday (27 November). This month, FinTech Futures was contacted by a source that says two firms are owed $2 million via WB21’s money transfer service. One of them the source currently works for, the other was a previous job. The source revealed the company names to us but did not want to go public on his/her name and the firms’ names. I have checked them out and all appear legitimate.
The source says: “WB21 is withholding funds with no explanation or contact whatsoever. Transfers from WB21 to third parties have not been executed. Impossible to withdraw funds from WB21 account.” This user has attempted to contact WB21 repeatedly but to no avail. WB21 says that without disclosure of any client specific information, WB21 is not able to discuss such matters publicly. However, in general terms, the main reason why clients might find their accounts to be restricted, is if there are compliance or risk related issues.
A very basic search on its name or other variations will reveal the nature and extent of the allegations being made against WB21. Some of the accusers have gone public with their names. Others didn’t.
Comments included “WB21 Customer Service keep saying my money is safe but I have asked several times to send me the swift confirmation and they have not, so it means they have stolen the money.”
On the whole it’s a very bleak and repetitive situation for a lot of people. There are simply too many negative comments to mention. That doesn’t make a firm guilty of a crime, but it does raise some questions.
FinTech Futures contacted WB21 for its response to these accusations and it did not initially reply but WB21 later commented saying “given their total numbers of customers being in the millions, the number of complaints found on the internet are less than 0.0001%.” According to WB21, “it is the usual pattern that happy bank customers simply stay silent and only those who believe they have reason to complain go public.”