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Australia's Afterpay shares leap after audit finds 'low risk' of money laundering
[BENGALURU] Australian buy-now-pay-later company Afterpay Touch Group Ltd on Monday said an external auditor had found it was a "low-risk business" in terms of money laundering and terrorism financing, sending its shares up more than 9 per cent.
Australia's financial crime watchdog ordered the company to conduct the independent audit earlier this year amid concerns over non-compliance with anti-money laundering and counter-terrorism financing (AML/CTF) laws.
The move caused ripples in a sector that has become a darling of stock analysts due to its global expansion and ability to benefit from online-shopping growth.
The auditor found Afterpay was "now appropriately aligned" to AML/CTF rules, Afterpay said in a filing to the stock exchange. The company reiterated it had not found any money laundering or terrorism-financing activity on its systems.
The regulator, the Australian Transaction Reports and Analysis Centre (AUSTRAC), would now consider the auditor's report and determine whether any further action was required, Afterpay said.
AUSTRAC ordered a similar audit of PayPal Holdings Inc in September, flagging concerns that reporting obligations had not been met.
Buy-now-pay-later companies let shoppers purchase products without paying upfront, and without the regulatory hurdle of applying for a credit card or loan, and typically make money by receiving fees from vendors.
Australia's financial sector is under mounting regulatory scrutiny after a series of scandals and revelations of widespread wrongdoing, including massive breaches of AML/CTF rules.
AUSTRAC last week accused the country's second-largest, lender Westpac Banking Corp, of failing to report millions of suspect transactions.