The German Federal Financial Supervisory Authority (BaFin) has taken significant regulatory action against Varengold Bank AG due to critical deficiencies in its measures against money laundering and terrorist financing. The institution was found to have serious failings, particularly in handling transactions related to Iran.
As a result of the findings from inspections conducted in 2022 and annual audits for 2022 and 2023, BaFin ordered Varengold Bank to implement necessary corrective actions to address these deficiencies. These shortcomings were extensive, impacting key areas such as risk analysis, the development and application of an IT monitoring system, customer due diligence procedures, and adherence to internal safeguards.
On July 25, 2025, BaFin mandated that Varengold Bank take immediate steps to rectify these identified issues. The order from BaFin is deemed final and binding, indicating the institution must comply without the possibility of appeal.
In addition to the remediation directive, Varengold Bank was subjected to an administrative fine of EUR 3.3 million for failing to submit suspicious transaction reports within the required time frame over an extended period from June 2023 to March 2025. This punitive measure is also final and binding, reflecting the severity of the bank’s non-compliance with regulatory obligations.
Furthermore, on February 26, 2025, BaFin imposed a coercive fine of EUR 500,000 on the bank, linked to multiple breaches of a prior administrative order issued on June 27, 2023. This earlier order had prohibited the bank from conducting any transactions involving payment agents and other third parties associated with Iran, due to significant risks related to money laundering and profound shortcomings in their prevention protocols.
The measures outlined by BaFin underscore the regulatory authority’s commitment to enforcing compliance within the financial sector, particularly in areas vulnerable to money laundering and financing of terrorism. Varengold Bank’s execution of these orders and ongoing compliance will be closely monitored, as it has submitted a remediation plan to the authority and is required to provide continuous reports on progress.
Overall, the actions taken by BaFin reflect broader efforts to enhance financial oversight and ensure all institutions adhere to stringent regulations designed to maintain the integrity of the financial system. The implications of these findings on Varengold Bank’s operations and reputation will likely be significant as they work to remedy the identified issues and prevent future violations.