Spreadex has been hit with a £2m penalty from the UK Gambling Commission due to AML failings.
It comes after a compliance assessment undertaken in July 2023 shone a light on shortcomings in the approach of the firm.
Furthermore, the firm is set to undertake an independent third-party audit to ensure its AML and safer gambling controls are being properly enforced.
At the heart of the failings was Spreadex’s failure to consider core risk factors such as customer profiles, transaction methods and geographic exposure.
In terms of social responsibility, the report signified an example of when a customer hit a daily deposit cap of £3,340 on 12 separate days within two weeks. Despite this aggressive spend rate, Spreadex had minimal response or interaction with the customer.
John Pierce, UKGC Head of Enforcement, stated: “The conclusion of this case marks the second time Spreadex Limited has been subject to enforcement action. Its failure to uphold anti-money laundering standards, delays in necessary interventions, and weaknesses in social responsibility measures were unacceptable.
“The operator placed undue reliance on customer assurances about the source of funds, rather than obtaining evidence from independent and verifiable sources, as we would expect. Operators must not only implement and maintain robust anti-money laundering policies, procedures, and controls, but also act swiftly in response to any indicators of suspicious activity.”
The investigation also emphasised an over-reliance on customer self-reporting and a failure to request Source of Funds (SOF) documentation.
This was underlined as a player deposited around £64,000 in a short window without prompting additional checks. The same individual went on to lose £50,000 in a month.
The watchdog also highlighted the firm’s failure to adapt its scrutiny in line with changing behaviour. Repeat AML checks were applied with little regard for escalating risks, particularly in cases of growing deposits or intensified betting patterns.
