Wise plc, the London-listed international payments company formerly known as TransferWise, saw its shares crater on June 1 after the Bureau of Investigative Journalism reported that Belgian prosecutors had opened an investigation into the firm’s operations. The probe centers on allegations that Wise accounts were used to launder approximately €500 million, roughly $583 million, connected to fraud, drug trafficking, and corruption across multiple European countries.

Shares plummeted as much as 20% intraday before clawing back some losses. By the closing bell, the stock had settled around 9-15% lower.

What triggered the investigation

The Belgian investigation was reportedly sparked by hundreds of cross-border judicial requests that flagged suspicious transactions flowing through Wise accounts. The scope is notable: €500 million in potentially illicit funds allegedly tied not just to garden-variety fraud, but to drug trafficking and corruption across European jurisdictions.

Wise Europe, the company’s EU operations arm, is headquartered in Belgium. Belgium serves as Wise’s gateway to the broader European market through the financial services passporting framework, which allows a firm regulated in one EU member state to operate across the bloc.

Wise confirmed it is cooperating with the Brussels prosecutor’s office. The company characterized the engagement as part of routine regulatory interactions and noted that the queries are still incomplete, with no definitive findings reached.

This isn’t Wise’s first compliance headache in Belgium. Back in 2022, the National Bank of Belgium required the company to implement a remedial action plan to address gaps in customer verification and due diligence procedures. Those gaps reportedly affected hundreds of thousands of users.

The compliance track record

The 2022 remedial action from the National Bank of Belgium required Wise to fix verification and due diligence processes affecting a large portion of its user base. Whether those fixes were sufficient is now, implicitly, the question Belgian prosecutors are asking.

What this means for investors

The intraday drop of roughly 20% tells you how spooked the market was by the initial report. The partial recovery to a 9-15% loss by close suggests some investors saw the selloff as overdone.

Belgian prosecutors have not announced any formal charges or conclusions. Wise has emphasized cooperation and the absence of definitive findings.

If Belgian authorities determine that Wise’s controls were materially deficient, it could trigger enhanced scrutiny from regulators in other EU member states where Wise operates under its Belgian passport. A finding in Belgium doesn’t stay in Belgium when your entire European operation runs through Brussels.

Investors should watch for two things in the coming weeks: any formal communication from Belgian prosecutors about the scope and timeline of the investigation, and whether other European regulators initiate parallel reviews of Wise’s operations in their jurisdictions.