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UK financial regulators have fined Wise’s chief executive Kristo Käärmann £350,000 for breaching conduct rules and failing to notify them of “significant tax issues”, but have cleared him to continue in his job.

The Financial Conduct Authority launched an investigation into Käärmann’s conduct after he was fined by tax authorities in 2021 over a deliberate tax default.

The regulator on Monday said Käärmann had “failed to appropriately consider the significance of the tax issues and notify the FCA, despite being aware of them for over seven months”.

Käärmann, whose fine was reduced from £500,000 because of early settlement, said: “After several years and full co-operation with the FCA, we have brought this process to a close. I remain focused on delivering the mission for Wise.”

Käärmann’s default relates to an outstanding tax bill of £720,495 for the 2017-18 tax year, which led to a fine of £365,651 by HM Revenue & Customs. Financial regulators then launched an investigation into Käärmann’s disclosure of the fine.

The FCA investigated because Käärmann’s status as an “approved person” means the regulator must deem him “fit and proper” to do his job.

The watchdog said Käärmann had explained during the probe that he “did not believe that he needed to inform the Authority of the tax issues because his dealings with HMRC were in his view a personal matter” and therefore “not relevant” to his fitness and propriety.

“We, and the public, expect high standards from leaders of financial firms, including being frank and open,” said Therese Chambers, the FCA’s joint executive director of enforcement and oversight.

“It should have been obvious to Mr Käärmann that he needed to tell us about these issues which were highly relevant to our assessment of his fitness and propriety,” she added.

Käärmann founded Wise in 2011 with Taavet Hinrikus to offer cheaper and faster cross-border transfers between the UK and Estonia. The company, formerly known as TransferWise has grown into one of the UK’s biggest fintechs and listed in London in 2021.