The German financial authority mandated that the local Coinbase office adhere to the risk and capital standards specified in German banking law.
BaFin, Germany’s financial regulator has ordered the German office of crypto exchange giant Coinbase to “ensure adequate company structure,” according to a statement released Tuesday.
BaFin cited two specific parts of the German Banking Act as having been violated. In one part, needs for sustainable development, risk strategy, and internal capital adequacy protection are outlined.
In accordance with the Banking Act, the German regulator also wants Coinbase to “provide continuous adequate and effective risk management that includes outsourced operations and procedures.” The injunction went into force on October 27.
“Coinbase is dedicated to complying with all legal standards associated with this system. As we work to resolve the issues of the yearly audit report, we are collaborating completely “Coinbase said to The Block in a response.
“Coinbase views regulation as a business enabler, and the work to implement the BaFin-identified steps has already started,” the company noted. “To address BaFin’s concerns, we have established a remediation plan that adequately addresses each issue in the audit report. We have made great progress on this goal to date.”
“An examination of the institute’s yearly financial accounts found organizational shortcomings,” said BaFin. The organization’s regularity was not confirmed in all audited areas.
In July 2021, Coinbase obtained a crypto custody and trading authorization from BaFin to lawfully provide its services to German consumers.