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Shares of online bank Wise fell as much as 20% on Monday after Belgian prosecutors said they were investigating whether the money-transfer company's European operations were used to facilitate money laundering and whether its anti-money-laundering (AML) controls were sufficient.

The probe reportedly centers on more than €500 million (about $582 million) in suspicious transactions linked to criminal investigations across Europe. Wise says it is cooperating fully with authorities and has not been informed of any formal findings or charges.

Brussels is prosecuting Wise and authorities are examining whether criminal organizations used Wise accounts to move proceeds from fraud, corruption, and drug trafficking. The investigation reportedly covers suspicious transactions worth roughly €500 million and involves information requests from more than 30 European jurisdictions.

The probe has reportedly been underway since last year and is said to be in an advanced stage. Authorities are investigating whether Wise complied with AML requirements, including customer identification and transaction monitoring obligations.

Meanwhile, Wise is acting cool by saying this is business as usual and stressing that prosecutors have not shared any specific findings.

The market got spooked anyway. Wise shares fell as much as 20% in London trading before recovering some losses — one of the steepest declines since the company listed publicly. Investors reacted more to potential regulatory, legal, and reputational consequences rather than any confirmed misconduct.

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If the Wise business model seemed too good to be true, that’s because it is. The case strikes at the heart of one of fintech's biggest challenges: balancing rapid customer growth with increasingly stringent financial-crime controls.

Wise has built its reputation on offering fast, low-cost international payments and now serves roughly 19 million customers globally. It’s also exactly the type of business Europe is growing curious about. Regulators and prosecutors have become more aggressive following a series of high-profile AML scandals involving banks and payment processors. Recent investigations into payment companies and banks operating in Belgium demonstrate authorities' willingness to pursue institutions even when wrongdoing has not yet been proven.

Investors are sizing up companies accordingly. Even if Wise ultimately avoids penalties, investigations can be costly, consume management attention, increase compliance spending, and damage customer trust.

This could go in many different directions. It could turn out to be routine: prosecutors could conclude that Wise's controls were adequate and close the investigation without action.

Alternatively, authorities could identify compliance failures that could result in fines or legal proceedings. For now, no formal findings have been disclosed and no charges have been announced.