Crypto-friendly digital bank Revolut is under pressure from U.K. regulators after an "unacceptably high" risk of "material misstatement" was highlighted in the auditing of its accounts, the Financial Times reported Monday.
An audit of an unidentified company by BDO was criticized by the Financial Reporting Council (FRC), the accountancy and auditing watchdog.
The "financial services provider" under audit was identified as Revolut by people familiar with the matter, the FT said.
The audit was conducted with an "inadequate" approach to revenue recognition, meaning the "the risk of an undetected material misstatement was unacceptably high." The FRC also had concerns over how BDO tested payment processes.
Crypto trading accounts for up to 10% of Revolut's annual revenue, which was 261 million British pounds ($300 million) in 2020.
Its application to be licensed by the Financial Conduct Authority (FCA) remains unresolved, with the firm able to offer crypto services through the FCA's Temporary Registration Regime.
Revolut had not responded to CoinDesk's request for comment at press time. BDO declined to comment.