Mercury restricted a number of accounts linked to African startups and did not explain exactly why.

by MMC
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Image credits: Getty Images

Yesterday, Mercurywhich describes itself as a bank for startups, has restricted several accounts linked to African tech startups, TechCrunch has learned.

The number of companies involved in this restriction is unknown. But multiple sources told TechCrunch they range from a dozen to 30, including established YC-backed startups and newcomers.

According to our sources, Mercury did not give prior notice that it would take this measure and also did not explain why this measure had been taken in its first email addressed to the startups concerned.

“Hello, Your access to the Mercury account for (company name) has been temporarily restricted. Let us know if you have any questions or concerns,” read the first email sent by Mercury.

Upon further questioning, Mercury, which holds over 4 billion customer deposits for its 40,000+ businesses in over 200 countries, told some of these startups that their accounts had been flagged and subject to review by its compliance team after noticing “unusual activity.” ” and could not provide further details until his review was complete.

“We don’t have a firm date on when this will be completed, but we will provide an update as soon as we have one.” We prioritize reviewing your account with our banking partner. We apologize for any inconvenience this may cause,” he said in another email.

Some founders and tech players took to Twitter to express their disappointment with Mercury’s decision to block these accounts without any concrete reason. For a number of these startups, Mercury’s restriction came at an inopportune time – the end of the month – when major obligations such as salaries and taxes needed to be met; now they will have to wait, say the founders.

A few founders, who chose not to be named, said Mercury’s decision could be linked to the ongoing conflict between Russia and Ukraine, which has seen the company’s partner bank review its exposure to regions “to high risk” like Africa. However, in an email sent to one of the founders whose startup was affected, Mercury attempted to emphasize that its intention was not for the founder and his company to “feel isolated or held to different standards.” .

It’s hard to think this isn’t the case, given that startups in other regions don’t appear to have encountered a similar problem, judging by situation-related activity on Twitter.

A spokesperson responding to TechCrunch’s request for comment said Mercury was aware that one of its primary banks had suspended the accounts of a number of the startup’s customers in Africa. And even if the bank acted in accordance with its internal procedures, the suspension harmed some of its customers.

“Our top priority is to work with the bank to resolve this issue as quickly as possible. We are contacting affected customers directly and apologize for the disruption caused by this event,” he said in the remainder of the email to TechCrunch.

Meanwhile, the CEO Imad Akhund contacted the persons concerned by e-mail:

Hello everyone,

I’m the CEO of Mercury. Since many of you have emailed/messaged me directly, I thought it would be best if I contacted you directly.

We discovered yesterday that our partner bank had noticed unusual activity and had asked us to lock and investigate a large number of accounts with related activity. We conduct due diligence on all of these accounts and will contact you individually with questions if we have any about your account or business.

As this is a fairly large set of accounts, it takes us some time to go through them all, but it’s the highest priority for us internally and we have over 10 people working on this.

We apologize for this sudden inconvenience and hope to implement better practices to avoid this in the future. We will contact you directly as we progress and please feel free to email me at this email if you have any additional questions.

Greetings,

I’m mad



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