Polish fintech Conotoxia Sp. z o.o., operating the currency exchange brand Cinkciarz.pl, is contesting a decision by the Polish Financial Supervision Authority (KNF) to revoke its payment services license. It is alleging procedural irregularities and harmful impacts on customers.

Polish Fintech Conotoxia Challenges Regulator's Decision to Revoke License

The KNF announced on October 2 that it had unanimously revoked Conotoxia's license, citing concerns about the company's management of payment services. However, Conotoxia claims it was not properly notified of the decision or given an opportunity to review case files and present its defense.

In an official statement, the company clearly states that “KNF violates the law” and “acted to the detriment of users.” As suggested by the statement, Conotoxia aims to fight against the “current banking lobby,” which protects its own interests by prioritizing them over the interests of users and competing fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term entities.

“The KNF violated the provision of Article 105(1)(6) of the Payment Services Act. Given a choice of six supervisory measures against a Company with no previous administrative penalties, it decided to wind it up straight away, a phenomenon in supervision that should help entities solve their problems, not destroy them,” the company commented in another of the series of statements made in recent days.

“How the KNF's decision was disclosed online created an unjustified market panic and Inquisition-like judgement over the entire capital group. No financial institution can withstand such pressure.”

Last week, Cinkciarz.pl also declared war on Polish banks by announcing plans to sue six of them for at least 3 billion zlotys ($750 million) in compensation for an alleged collusion aimed at restricting access to the currency exchange market.

The fintech argues the banks’ and the regulator's actions have caused unwarranted market panic affecting not just Conotoxia Sp. z o.o., but other entities in its holding group. It estimates potential damages to merchants using its services could reach billions of zlotys due to disruptions.

Conotoxia also highlighted concerns about the impact on its approximately 100,000 active multi-currency card users, who will lose access to their cards on October 17. “Many of our customers are abroad (work, medical treatment, holidays)—being cut off from the payment card operation could have unimaginable and irreversible consequences,” the statement added.

The fintech firm plans to challenge the KNF's decision through legal channels. It has deliberately delayed formally receiving the decision until October 16 at 23:59, the latest possible time, in an effort to protect customers.

Conotoxia Ltd is Not the Same as Conotoxia Sp. z o.o.

Cinkciarz.pl and Conotoxia operate under several subsidiary companies with similar names, which can create some confusion. While the KNF has revoked the domestic payment institution license of the Polish branch, the license issued by Cyprus for conducting CFD transactions remains unaffected. Finance Magnates learned that due to the similarity in names, the Cypriot regulator has also reportedly taken interest in the situation.

Grzegorz Jaworski, CEO of Conotoxia Ltd, a broker licensed by CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term, addressed the matter in a letter sent last week to “clients, contractors, business partners, and media,” emphasizing that the recent actions by the KNF did not involve the company he represents.

“Our company Conotoxia Ltd is a separate entity that holds a license to conduct brokerage activities in Poland, among other places,” Jaworski stated. “Our company does not and has never provided any payment services to clients and has nothing to do with the Polish Financial Supervision Authority's decision regarding Conotoxia sp. z o.o.”

He added that this decision does not impact the operations or the safety of client funds at Conotoxia Ltd in any way.