The Bank of Lithuania has restricted the activities of Foxpay, a financial technology company under the scrutiny of law enforcement authorities, and appointed a temporary representative to supervise its operations.
The move was due to a threat to the safe and reliable activities of Foxpay and users’ interests, the central bank said after completing an inspection of the company.
The audit, accounting and consulting firm Grant Thornton Baltic has been appointed the temporary representative of Foxpay.
“The temporary representative does not take over the management of the institution; its appointment does not affect clients or their ability to use services,” the central bank said in a statement.
“Foxpay will be able to continue its activities to the extent not constrained by the obligations imposed by the Bank of Lithuania,” it added.
According to the Bank of Lithuania, however, any decision taken by the management of Foxpay will be subject to the consent of the temporary representative and the central bank will be provided with regular information on the company’s activities.
“Significant and substantial shortcomings” were found in Foxpay’s operations and its management during the inspection period, from September 30, 2022, to March 20 this year, the Bank of Lithuania said.
In addition, it was found that the shareholder of Foxpay, Ieva Trinkūnaitė, did not meet the requirements of good repute and that “a person closely related to her was involved in the activities of the company”.
According to the central bank, Foxpay also failed to adequately implement the requirements for the protection of client funds and internal control and information security management in this area.
The Bank of Lithuania launched its unscheduled inspection of Foxpay and its owner Trinkūnaite in mid-March. In June, the central bank restricted the company’s use of its Centrolink payment system, except for payments related to the public sector. Foxpay has appealed the decision in court.
The Bank of Lithuania allowed Trinkūnaite to acquire Foxpay in 2022 following reviews by various authorities.
However, the governmental commission vetting strategic companies’ transactions ruled in May that the businesswoman does not meet national security interests. The cabinet announced the same conclusion on June 5.
The Special Investigation Service has opened a pre-trial investigation into the company’s potentially non-transparent activities.
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