N26 Investors Seek to Replace Co-CEOs Amid BaFin Critique

N26 investors are urging the bank's co-CEOs, Valentin Stalf and Maximilian Tayenthal, to step down after fresh criticism from German regulator BaFin. The investors have proposed waiving returns in exchange for the executives' departure, but a sticking point is whether they will join the N26 supervisory board. BaFin has identified new deficiencies in N26's internal controls and has until later this month to submit a detailed reply on how to resolve the issues.

German neobank N26 is facing internal pressure from investors who are urging the company's co-CEOs, Valentin Stalf and Maximilian Tayenthal, to step down. The move comes in the wake of fresh criticism from Germany's financial regulator, BaFin, which has identified new deficiencies in N26's internal controls [1][2].

BaFin's latest report highlighted several issues with N26's internal controls, prompting some investors to demand a change in leadership. The investors have proposed waiving part of their returns in exchange for the co-CEOs' departure, but the executives' special voting rights are making the process difficult [1][2].

N26 has faced regulatory sanctions in the past over shortcomings in its anti-money laundering controls. The company has had multiple run-ins with BaFin, resulting in multi-million euro fines and limits on customer acquisition [1]. Despite these challenges, N26 has been reorienting its business toward growth and achieved its first profitable quarter in Q3 last year [1].

The turmoil follows a report submitted to N26 by BaFin that identified new deficiencies in the company's internal controls. N26 has until later this month to submit a detailed reply on how to resolve the issues. BaFin may opt for installing a monitor for a second time, but no decision has been taken in this respect [2].

N26's ability to grow was previously limited by a cap on client acquisition imposed by BaFin in 2021. The bank subsequently invested heavily in its controls infrastructure, contributing to an annual loss of €213 million in 2023. BaFin removed the growth cap a year ago [2].

The company is considering a new funding round at a reduced valuation that could allow some of its existing investors to recoup part of their investment [2].

N26 has declined to comment on the specifics of its exchanges with BaFin, stating that it is "in regular exchange" with current and prospective investors and has "no immediate need to raise additional capital" [1].

References:
[1] https://sifted.eu/articles/n26-investors-want-ceo-founders-replaced-2
[2] https://www.bloomberg.com/news/articles/2025-08-15/n26-investors-seek-to-replace-co-ceos-after-regulator-s-critique