The Polish Financial Supervision Authority (KNF) has unanimously revoked Conotoxia sp. z o.o.'s payment services license. It cited 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.

“The company remains fully at the disposal of the KNF. We cooperate openly and honestly with the Commission, responding to all questions and concerns and providing all required documents,” the company commented in an e-mailed statement, originally in Polish, to Finance Magnates.

“At the same time, we wish to inform that the company strongly objects to the decision issued. Acting in the best interest of our clients, we are taking all legal steps to overturn the decision made by the KNF as soon as possible."

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 Cyprus-issued license for conducting CFD transactions remains unaffected and in force.

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 court's decision.

Update on October 4, 2024, at 11:00 AM. The article has been updated with Conotoxia's statement.