The German financial authorities have accused the cryptocurrency exchange Coinbase of breaking the standards that qualify it as a "proper business organization" in that country. Coinbase has been ordered by the German Federal Financial Supervisory Authority (BaFIN) to disclose information on the operations of its local branch. The German financial watchdog wants to confirm if Coinbase is adhering to all applicable banking regulations.
The German division of Coinbase must have plans for managing, monitoring, and controlling risks in order for its financial status to be consistently and accurately predicted.
"An examination of the institute's annual financial accounts exposed organizational shortcomings. In some of the audited sectors, the business organization's regularity was not acknowledged, according to a statement from BaFIN.
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Its local Coinbase arm must be able to issue audit certificates to report on its annual accounts in accordance with German regulations.
BaFin has complained about the outsourcing of certain of Coinbase's activities in Germany since it is "critical" for doing banking business.
According to a Coinbase representative, the company has created a remediation plan that addresses each point of the audit report in order to allay BaFin's worries.
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"Coinbase views regulation as a business facilitator, and the procedure to implement the BaFin-identified steps has already started. We have made significant work toward this goal so far, the Coinbase representative told Cointelegraph.
According to a recent KPMG analysis, the German cryptocurrency trading platform Trade Republic has emerged as this year's largest investor, pouring $1.1 billion (approximately Rs. 8,800 crore) into the cryptocurrency market.
According to research firm Triple-A, there are close to five million cryptoasset owners in Germany.
Germany granted its permits to Coinbase, which seeks to be the cryptocurrency company with the most licenses worldwide, back in July 2021.
