City watchdog probes Airbnb ahead of New York float

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The UK’s financial watchdog is investigating Airbnb over concerns about the tech firm’s anti-money laundering and counter-terrorist financing systems. 

The Financial Conduct Authority last year called on UK electronic money institutions to review their compliance on safeguarding customer funds. 

Read more: Airbnb reveals deeper loss ahead of stock market float

Airbnb Payments UK (APUK) told the City watchdog that it had identified gaps in its compliance and was undertaking action to fix the problems.

The FCA subsequently appointed a “third-party skilled person” to review APUK’s safeguarding controls, which “identified certain issues with APUK’s anti-money laundering and counter terrorist financing systems”. 

Details of the probe came to light in the prospectus for Airbnb’s £22.6bn New York float, which is expected early next month.

The holiday rental company posted a loss of $697m (£527m) on revenue of $2.5bn in the nine months to the end of September, a widening of the $323m loss recorded in the same period last year.

The outbreak of coronavirus sparked a sharp downturn in Airbnb’s business in the first half of the year, with the firm posting a $576m loss at the height of the crisis in the second quarter.

Airbnb was forced to cut a quarter of its workforce in May, suspend marketing activities for the year and seek $2bn in emergency funding from investors.

Read more: Airbnb suspends 800 party houses in crackdown on antisocial behaviour

In the third quarter revenue was down 18 per cent at $1.3bn, but the company swung to a net profit of $219m after taking steps to slash costs.

“The recovery in the second and third quarters of 2020 is attributable to the renewed ability and willingness for guests to travel, the resilience of our hosts, and relative strength of our business model,” Airbnb said.

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