The Polish
Financial Supervision Authority (KNF) has unanimously revoked Conotoxia sp. z o.o. ‘s payment services license, citing the company’s failure to
ensure prudent and stable management of its payment services activities.

Polish Fintech Conotoxia
Stripped of Payment License

In a
statement released
yesterday (Wednesday), the KNF said its decision was primarily based on
Conotoxia’s non-compliance with statutory obligations related to protecting
funds received from payment service users for the execution of payment
transactions.

“As a
result of the administrative investigation and based on supervisory findings,
the KNF concluded that the company does not ensure prudent and stable
management of the payment services business. Therefore, there is a rationale
for revoking the company’s authorization to provide payment services as a
domestic payment institution,” KNF commented in a statement originally
published in Polish.

The Polish regulator
has ordered Conotoxia to immediately cease opening new payment accounts and
stop accepting deposits or transfers to existing accounts. Existing account
holders will be allowed to withdraw funds or transfer them to other providers
until all obligations are settled.

It’s
important to emphasize that Conotoxia, which operates the popular local fintech
brand Cinkciarz.pl, conducts business through several different companies.
Conotoxia sp. z o.o. is responsible for operating as a payment institution.
Additionally, Cinkciarz.pl sp. z o.o. functions as a currency exchange service
provider and is a SWIFT member. Meanwhile, Conotoxia Ltd, licensed by CySEC,
provides services in the FX/CFD market.

Therefore,
while the KNF has revoked the domestic payment institution license according to
its latest decision, the license for providing CFD transactions issued in
Cyprus remains
valid.

Conotoxia,
which operated through agents Cinkciarz.pl sp. z o.o. and Cinkciarz.pl
Marketing sp. z o. o., has been given until December 31, 2024, to terminate all
legal relationships arising from its payment services contracts and satisfy any
related claims.

The KNF has
stated it will closely monitor Conotoxia’s wind-down process to ensure all
client funds are properly returned or transferred.

Finance Magnates wrote about Conotoxia over a year ago when the company celebrated a victory in a decade-long legal battle with another local digital currency exchange, Currency One SA. This rival had used Conotoxia’s name as a search engine keyword to advertise its services. The court mandated Currency One to compensate Conotoxia with a payment of 2 million PLN (approximately 440,000 EUR) among other stipulations. Currency One has stated its intention to challenge the decision of the court.

This article was written by Damian Chmiel at www.financemagnates.com.

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