German regulator BaFin imposes new sign-up caps on neobank N26

N26, a Germany-based neobank with a global presence, has been ordered by German financial regulator BaFin to limit new account signups in an effort to slow down its expansion.

Why should we care?
N26, which this week reported a $900M fund raise amid a $9B valuation, is now worth more than Commerzbank, Germany’s second-largest bank. The company has grown rapidly since it was founded in 2013, and has a presence in more than 20 countries (including the U.S.) and boasts more than 7 million customers. N26, which is thought to be planning an eventual IPO, has had its share of run-ins with regulators. In June, BaFin fined N26 $5 million for being late to file reports of suspicious transactions, and in May, BaFin told N26 to strengthen its anti-money laundering measures. This week, N26 said it reached an agreement with the regulator to limit the number of new customers iit onboards each month to a maximum of 50,000 to 70,000. The company said the move was a temporary measure to allow it to beef up internal processes and controls. N26 is loss-making, but founder and co-CEO Maximilian Tayenthal said it’s under no pressure from investors to turn a profit.