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UK Fintech Stenn collapsed into administration after a reference to the company in a US criminal indictment over a Russian money laundering scheme has prompted its lenders to investigate potentially suspicious transactions, according to people familiar with the situation.
Stenn, which specialized in invoice finance and once had a valuation of $900 million and partnerships with international banks such as Citigroup and Barclays, had two of its UK units placed into administration last week following an application to London’s High Court by HSBC Innovation Bank, one of his backers.
HSBC began investigating potentially suspicious transactions at the London-based startup earlier this year after US authorities unlocked criminal charges in a money laundering case involving passing matter.
Stenn’s collapse is likely to shine a spotlight on the due diligence conducted by its banking partners and major investors, especially as a former auditor for the fintech resigned over concerns about some transactions and Karpovsky was previously involved with a Russian invoice finance company that later collapsed amid fraud allegations.
Citigroup announced in 2022 that it had formed a partnership with Stenn to “close the financing gap” for small and medium-sized businesses. That same year, US private equity firm Centerbridge Partners invested $50 million in the company’s preferred stock at a valuation of $900 million.
HSBC Innovation Bank’s exposure to Stenn is primarily through a revolving credit facility signed with Silicon Valley Bank UK, which was acquired by HSBC following the collapse of the US regional bank in 2023.
Stenn and Karpovsky were not charged with wrongdoing in the U.S. criminal case, in which they were not the defendants.
The references to them in indictments in that case were a trigger for HSBC to begin a deeper investigation into the fintech’s dealings that the people said revealed potentially suspicious transactions.
US authorities alleged in one of the indictments that Stenn Assets UK, one of the companies placed in administration, received $1.7 million in October 2020 from a Singaporean company linked to Feliks Medvedev, a Russian citizen found guilty earlier this year advocated running an unlimited money sending business involving more than $150 million in Russian money.
Karpovsky’s personal email address was listed in another indictment as being linked to a trading account at a Singapore metals exchange used in the scheme.
In addition to Medvedev, U.S. authorities charged two other Russian nationals for alleged conspiracy in the scheme—accusing them of offenses including money laundering—while the U.S. Treasury imposed sanctions on one of these alleged co-conspirators and his company last year.
Karpovsky told the Financial Times that he was “cooperating” with Stenn’s administrators and that it “would not be appropriate” to comment on that process.
“However, I am clearly concerned about any allegations of impropriety against me and I deny any wrongdoing in connection with Stenn,” he added.
Citi, HSBC, Barclays and Centerbridge declined to comment. Bloomberg previously reported that HSBC had discovered questionable transactions in Stenn without mentioning the charges.
In 2018, Auditor Ey van Stenn resigned citing “concerns about certain related party transactions” and the “adequacy of explanations” given by management, according to a publicly filed letter.
Before founding Stenn in 2015, Karpovsky was the founder and chief executive of Eurokommerz, an invoice finance company that fell into insolvency in late 2008 after defaulting on its debt.
In 2010, the HBK investments in the US hedge fund sued Russia’s Troika investment bank, claiming that Eurokommerz was a “massive fraud” that was “built on fake clients and non-existent claims”. Troika, a shareholder of Eurokommerz, denied the allegations. HBK later withdrew the New York lawsuit.
Karpovsky told the FT that “any potential misconduct in that company has been proven to have occurred long after my departure from the company.”
Karpovsky was also a director and shareholder of another British fintech company that failed this year after potentially suspicious transactions linked to Russia were discovered.
Silverbird Global collapsed into administration in March after its management team discovered that certain payments to its intermediaries in 2022 and 2023 could be potential breaches of financial sanctions linked to Russia, according to a report by its administrators.
Shortly after Silverbird collapsed, its chief executive and founder Maxim Faldin – also known as Max Grossman Yavorsky – joined Stenn as the company’s new chief customer officer.
Faldin did not respond to a LinkedIn message seeking comment.
Additional reporting by Emma Dunkley