The Cyprus Securities and Exchange Commission (CySEC) recently imposed a €30,000 fine on Plum, a smart money management app, for failing to comply with several critical financial regulations. The penalties stem from Plum Money CY Limited’s failure to maintain necessary capital and liquidity levels as per prudential requirements, as well as missing key reporting deadlines. While the fine is modest, it highlights the growing regulatory scrutiny facing fintech firms as they expand across Europe.
According to CySEC’s report, Plum Money fell short on three primary compliance areas:
1. **Capital Requirements**: CySEC levied an €8,000 fine on Plum for not meeting minimum own funds requirements, in addition to another €8,000 for failing to maintain capital in line with regulatory thresholds.
2. **Liquidity Standards**: The company received an additional €8,000 penalty for not keeping adequate liquid assets. Regulations require firms to hold one-third of their fixed overhead requirement in liquid assets, a threshold Plum failed to meet.
3. **Reporting Obligations**: Finally, a €6,000 fine was issued as Plum missed its February 11, 2024 deadline for submitting its annual 2023 report.
Despite the fine, Plum Money’s recent financial success suggests it will not face a significant setback. The fintech company recently closed a £16 million Series B funding round, attracting notable investors, including iGrow Venture Capital, as well as existing supporters Venture Friends, Ventura Capital, and Eurobank. The firm’s crowdfunding campaign on Crowdcube also saw overwhelming support, with over 5,500 investors from the UK and EU participating, making it one of Crowdcube’s standout campaigns this year.
Plum has achieved impressive growth, now managing over £1 billion in assets. This recent funding will support its ongoing expansion across Europe, which in the past year included entering new markets in Italy, Portugal, the Netherlands, Greece, and Cyprus. Plum’s app offers users automated savings tools, commission-free investments in over 3,000 U.S. stocks, and a VISA debit card for added financial flexibility.
Alongside these services, Plum has partnered with cryptocurrency platform Bitpanda, allowing European users to invest in major digital assets like Bitcoin (BTC) and Ethereum (ETH). This strategic collaboration positions Plum as a versatile financial tool for both traditional and cryptocurrency investors.
In another recent move, Plum appointed Erinoula Kyrantonis as Head of Branding and Communications. With experience from previous roles at Red Bull and Vita Coco, Kyrantonis will lead Plum’s brand strategy and oversee consistent communication across platforms, aligning with the company’s aim to build a cohesive brand as it scales.
Despite facing regulatory challenges in Cyprus, Plum Money continues to thrive, expanding its services across Europe and securing new partnerships. While CySEC’s fine underscores the regulatory pressures in fintech, Plum’s robust growth and recent funding suggest it’s well-positioned to navigate these challenges and continue its trajectory as a leading money management platform.
