The German smartphone bank backed by billionaires Peter Thiel and Li Ka-shing has been ordered to bolster safeguards against money laundering and terrorist financing.

Germany’s financial regulator told N26 to “take appropriate internal safety measures” and “comply with general customer due diligence obligations.” The measures are likely to lead to higher security costs.

BaFin also said in the order, publicly released on Wednesday, that the lender must “remove backlogs in IT monitoring” and “ensure the existence of an adequate personnel and technical-organisational equipment in order to comply with its obligations under money laundering law.”

N26 spokeswoman Katharina Heller said the company is taking the order “very seriously” and has “already coordinated the necessary measures and deadlines for implementation with Bafin in advance.”

N26’s January fundraising valued the company at $2.7 billion, making it one of Europe’s most valuable non-listed fintech startups. It received $300 million from investors including Singapore’s sovereign wealth fund, GIC. The company, which is preparing a launch in the U.S., was founded in 2013.

Revolut Ltd., another fast-growing financial technology startup, has also faced some regulatory scrutiny following an alleged compliance lapse that could have allowed illegal transactions on its app.

“We are certain that we will implement all requirements even before the deadline,” N26’s Heller said. The company is working quickly to resolve any suspicious transactions and plans to double the number of its employees to more than 1,500 by the end of the year, she said. Neither Bafin or N26 specified what the deadline is.

