N26 has told users not to worry after financial regulator BaFin ordered the digital bank to throttle the bank’s onboarding of new clients until it’s fixed its money laundering issues.

“Existing N26 customers won’t be affected at all – you can expect the same seamless and secure mobile banking experience that you know and love, all while knowing that we’re working hard to keep improving your banking experience,” the neobank said in a blog on Wednesday.

N26 made the announcement after revealing that BaFin had ordered the challenger bank to limit the number of new users allowed on the platform to 70,000 each month, down from its regular average of 170,000.

The market watchdog issued the order after a protracted tussle with N26 in regards to its failings to comply with anti-money laundering (AML) regulations.

In September, BaFin slammed N26 with a €4.25m ($4.98m) fine over delayed AML reports on suspicious activities between 2019 and 2020. N26 has paid the fine.

On Monday, N26 announced a whopping $900m Series E funding round giving the startup a valuation of “more than $9bn”, according to the online bank.

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While CEO and co-founder Valentin Stalf was happy to say how the cash injection put N26 “in pole position to become one of the biggest retail banks in Europe”, the release also included the news that the digital lender’s growth will be held back for some time because of the BaFin order.

The challenger said it had agreed with the German regulator to temporarily onboard a maximum of between 50,000 and 70,000 customers per month. This will also be published in an upcoming order.

In a blog on Wednesday, N26 tried its best to ease any concerns, telling existing N26 customers that the order wouldn’t affect them “at all”.

The blog didn’t mention BaFin, instead framing the slowdown of customer onboarding as a way to “lay even stronger foundations for our business in the future” and to focus on its “service experience, product offering and processes” in order “to become an even better bank for you in the years to come.”

“Based on this decision, in conjunction with the overwhelming demand for N26’s digital banking products, we will be making a temporary adjustment to the number of new bank accounts that we can offer each month,” N26 said. “This means that we may not be able to instantly provide every new customer with an N26 account, at least in the short-term.”

People wanting an account with N26 will be put on a waiting list for the time being.

BaFin clamping down on N26 comes after the multi-billion Wirecard scandal exposed how the regulator had failed to detect the scam for years.

The collapse of the German payment processor has pressured BaFin and other financial market regulators to demonstrate stricter scrutiny of financial services companies.

In May, the UK’s Financial Conduct Authority notified British digital lender Monzo that it was being investigated over potential AML breaches.

The regulator launched its investigation after hundreds of Monzo customers complained in 2020 over their accounts being frozen without explanation, possibly due to the neobank’s own efforts to investigate suspicious transactions.

Monzo and N26 are part of a growing number of challenger banks, as noted in the recent GlobalData thematic research report Beyond the Hype – Insight into Digital Challenger Banks.