The Warsaw
Administrative Court (WSA) has dismissed Conotoxia sp. z o.o.’s (one of
Cinkciarz.pl subsidiaries) appeal against the Polish Financial Supervision
Authority’s (KNF) decision to revoke the company’s payment services license,
marking another development in the ongoing regulatory saga.

Fintech, in
its characteristic style, responds sharply: “The state protects the civil
service caste,” and announces another appeal, this time to the Supreme
Court.

Warsaw Court Backs KNF
Decision in Conotoxia Payment Services Case

In a ruling
delivered on March 5, the court affirmed the KNF’s October 2, 2024 decision to
withdraw Conotoxia’s authorization to
operate as a domestic payment institution. The court found that the KNF had
conducted its administrative proceedings correctly and properly established the
facts of the case.

“According
to the WSA, the Commission exhaustively analyzed the grounds for revoking the
permit, and comprehensively addressed the arguments raised by the Company,” KNF
commented in the official statement published this week.

The KNF’s
investigation reportedly revealed that Conotoxia had ceased to meet one of the
essential requirements for holding a payment services license and failed to
fulfill statutory obligations related to protecting funds received from payment
service users. This situation, according to the regulator, posed a real threat
to the interests of the company’s clients.

Conotoxia, however,
strongly disagrees with the court’s decision. In a statement, the company
criticized the ruling as confirming “a deep crisis of the legal system in
Poland” and accused the court of superficially addressing the arguments
presented in their appeal.

“The State Protect the Civil Service Caste”

In a
scathing statement, a Cinkciarz.pl
spokesperson said, “We are again faced with bureaucrats who feel they can
act above the law with impunity and beyond real state control.”

The company
alleges that the court only superficially addressed the charges outlined in
their complaint, particularly ignoring what they claim to be procedural
violations by the KNF.

Central to
Conotoxia’s grievances is the assertion that the KNF
failed to notify the company of collected evidence and denied them the
opportunity to respond before issuing its decision.

The fintech
firm also accuses the KNF of overstepping its authority by imposing obligations
not stipulated in the law, describing it as “‘law-making’ activities, for
which it has no competence.”

Conotoxia
argues that the court’s reliance on the “stereotype of a professional
entity” regarding the KNF is misplaced, citing past controversies
involving the regulator.

“We
have repeatedly indicated the phenomenon of mutual protection and avoidance of
responsibility by the state authorities,” the Conotoxia representative
stated. The company claims that “the state protects the civil service caste.”

The company
has announced its intention to file a complaint with the Supreme Administrative
Court, signaling that this legal saga is far from over.

Cinkciarz.pl Wants the
Money, 1,200 Alleged Victims and… Toilet Paper

The history
of the currency exchanger’s dispute with the regulator and banks is starting to
resemble a soap opera. Initially, the fintech threatened several Polish banks
with lawsuits
for billions of zlotys (though none of them have likely made it to court
yet), then claimed that the prosecutor’s office had initiated investigations
against the KNF (although in reality, the
request to start it was rejected).

Meanwhile,
the number of dissatisfied customers claiming they want to recover their money
is growing. A significant group has gathered around a case being pursued by the
prosecutor’s office since last year, which
mentions allegedly 1,200 victims and 328 blocked business accounts.

At the same
time, Cinkciarz.pl, which currently cannot exchange currencies as transfer
attempts are blocked by banks, allegedly
continues to demand payment from customers for failed transactions, sending
payment reminders.

The fintech
doesn’t hide this and claims that clients accepted the transaction terms, and
it’s not their fault that it cannot be executed.

“The
blocking of funds by banks at the request of the prosecutor’s office is not a
result of our actions but rather a decision made by state authorities, which
prevents clients from executing their agreements,” Cinkciarz.pl explained
in a statement. “In such cases, we expect clients to settle their
obligations.”

The case
has become so bizarre that Conotoxia announced that instead of currency
exchange, it
would start… producing toilet paper, as this doesn’t require additional
permits. The paper was supposed to be adorned with large golden letters
“KNF”.

And
although the fintech claimed it was an acronym for the Polish “I love
finance”, anyone with average intelligence can see that it’s a typical
mocking of the regulator.

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

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