Below is the letter from the UK lawyers of the FCA-regulated payment institution Volt. FinTelegram has mentioned that Volt (and many others) acts as a payment processor for online casinos and gambling. According to the UK law firm Simmons & Simmons, this is defamatory. Volt would only provide the technical infrastructure and, therefore, have no KYC/AML obligation. This is an interesting perspective that the FCA should look into. Here is the letter from the lawyers.
[start of letter]
Dear FinTelegram
Takedown Notice – article published on 31 January 2024 accessible via the following link https://fintelegram.com/uncovering-the-shadow-how-payment-processors-unwittingly-fuel-illegal-online-gambling-operations/ (the “Article”)
We refer to your email from Oliver, Legal Counsel, received today at 10:01, in response to our letter of 1 February 2024. In that e-mail you dispute our client’s allegation that your article is defamatory by stating that “your client is a payment processor for the Dama Group and therefore our article is correct and reflects the correct facts”.
Firstly, this is not correct. Our client does not provide the regulated payment service to Dama or any other gambling merchant. While visible as a brand at checkout, Volt’s role is limited to acting as technical service provider for the gateway which does not involve it in the provision of regulated payment services or the processing of payments for any party. Contrary to the assertion in your e- mail, Volt therefore has no responsibility in its capacity as an FCA-registered payment institution to conduct KYC and AML transaction monitoring.
Secondly, as you will be aware, the meaning of the words used is the essence of an action in defamation. The clear meaning of naming our client as “one of the most important payment processors for online casinos and gambling providers” in an article alleging illegal activity by payment processors is that our client engages in illegal activity. This suggestion is likely to cause our client significant financial harm.
You have now been on notice of the defamatory nature of the article for almost 24 hours. We will proceed to notify your site’s host to request removal of the article, and again repeat our request for the immediate deletion of our client’s name from it. Our client reserves all its rights including to initiate proceedings for defamation.
Yours faithfully
Simmons & Simmons LLP
[/end of letter]
Download the Simmons & Simmons letter here.
Preliminary Conclusion
In summary, Volt‘s law firm tells us that although Volt‘s logo appears as a payment processor at the Dama Group and other online casinos and gambling providers, and Volt technology is also used by players for deposits, Volt has nothing to do with this. Therefore, no KYC/AML checks would be required. It’s not Volt, it’s just their technology. Dear people from Simmons & Simmons, that’s why we talk about FinTechs and PayTechs, because without technology nothing works. In our opinion, however, this does not mean that an FCA-regulated payment institution has no responsibility for the use of technology. That is an absurd argument.
Share Information
If you have any information about the Volt case or other payment processors, please share it via our whistleblowing system Whistle42 or leave a comment.
