Planning an IPO, Wise owes Brazil an explanation

At the beginning of the month, news broke that banking fintech Wise — formerly TransferWise — was in talks with British regulators to go public in May. The announcement was largely well received, with suggestions that it could provide a “boost” to the London Stock Exchange and attract more tech companies. However, before any potential IPO, Wise still has some pressing questions to answer concerning dodgy operations in Brazil.

In March, MS Bank — Wise’s long-term partner in Brazil — accused the fintech of illegally using Brazilian customers’ accounts to send some BRL 100 million (USD 17.96 million) abroad tax-free, therefore involving private citizens in an unlawful scheme that carries a prison sentence. Before issuing these allegations, MS Bank had terminated its 2016 contract with Wise, temporarily interrupting the company’s money-transfer services in Brazil.

However, as MS Bank CEO Marcelo Sacomori tells The Brazilian Report, the first suggestions of fraud date back to 2018, when the bank noted a discrepancy between amounts registered with Brazil’s Central Bank and those on MS Bank’s own system. At the...