Coinbase Under German Scan, Asked to Reveal Details of Business Practices
Coinbase crypto exchange has found itself in trouble with German financial authorities for allegedly violating rules that classify the company as a ‘proper business entity’ there. Germany’s Federal Financial Supervisory Authority (BaFIN) has issued an order asking Coinbase to provide details on the business practices of its local arm. Germany’s financial watchdog aims to ensure that Coinbase operates in compliance with the country’s banking regulations.
The German arm of Coinbase is required to have risk management, monitoring and control arrangements in place to ensure that its financial position can always be calculated with sufficient accuracy.
“The audit of the annual financial statements revealed that there are problems in the institution. Normalization of the business organization was not provided in all the surveyed areas. BaFIN said in the statement.
According to German regulations, its local Coinbase arm must be able to issue audit certificates to report in its annual accounts.
BaFin raised the issue against Germany’s Coinbase outlining parts of its operations as ‘essential’ to the conduct of banking business.
A spokesman for Coinbase revealed that the company has activated a corrective action plan, addressing each finding in the audit report to address BaFin’s concerns.
“Coinbase considers regulation to be a business enabler and the process of implementing the steps identified by BaFin has begun. So far, we have made great progress in this process,” said Cointelegraph quote said a spokesperson for Coinbase.
This year, German crypto trading platform Trade Republic has emerged as the largest crypto investor pouring $1.1 billion (roughly Rs. 8,800 crore) into the crypto sector, a KPMG report had recently claimed.
research firm Triple-A It is estimated that around five million people own crypto assets in Germany.
Coinbase, which aims to be the most licensed crypto company in the world, received its approval in Germany in July 2021.