The German financial watchdog intends to verify if Coinbase is operating in accordance with the country’s banking laws.
Coinbase has revealed to the media that the company is working to address the issue
Photo Credit: Reuters
Coinbase crypto exchange has found itself in a soup with the German financial authorities for allegedly violating the rules that classifies the company as a ‘proper business organisation' there. The Federal Financial Supervisory Authority of Germany (BaFIN) has issued an order asking Coinbase to provide details on the business practices of its local arm. The German financial watchdog intends to verify if Coinbase is operating in accordance with the country's banking laws.
The German arm of Coinbase is required to have arrangements for managing, monitoring and, controlling risks to ensure that its financial situation can be always computed with sufficient accuracy.
“An audit of the annual financial statements revealed organisational deficiencies at the institute. The regularity of the business organisation was not given in all audited areas,” BaFIN said in a statement.
As per the German regulations, its local Coinbase arm must be able to provide audit certificates to report on its annual accounts.
BaFin has raised an issue against Coinbase's Germany arm outsourcing parts of its operations as ‘essential' for conducting banking business.
A Coinbase spokesperson has revealed that the company has curated a remediation plan, addressing each finding of the audit report to address BaFin's concerns.
“Coinbase considers regulation a business enabler and the process to undertake the measures identified by BaFin has already begun. To date, we have made substantial progress on this plan,” Cointelegraph quoted the Coinbase spokesperson as saying.
This year, Germany's crypto trading platform Trade Republic has emerged as the biggest crypto investor that poured $1.1 billion (roughly Rs. 8,800 crore) into the crypto sector, a KPMG report had recently claimed.
Research firm Triple-A estimated that nearly five million people hold crypto assets in Germany.
Coinbase, that aims to be the most licenced crypto firm in the world, received its approvals in Germany back in July 2021.
For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.