The German financial regulatory agency, BaFin, has directed Coinbase Germany to adhere to the rules published in the regulator’s press release statement on Tuesday.
In line with the German Banking Act, the financial regulator has ordered the crypto exchange giant to “ensure proper business organization” in its operations. Citing two sections of the act, BaFin noted that the German branch of Coinbase has violated existing guidelines.
One section emphasizes requirements for sustainable business development, risk management, and protecting internal capital. Thus, the regulator wants Coinbase to provide an effective risk management system alongside its outsourced activities and processes in line with the Banking Act.
For emphasis, the order has been in effect since October 27, 2022. In response, the crypto exchange revealed that it is committed to meeting all legal requirements in the country. Furthermore, Coinbase added that it is collaborating with the authorities to address the outcome of the yearly audit reports.
The company’s statement read:
“Coinbase sees regulations as the foundation for business expansion and has taken the necessary steps to address the issue identified by the German regulator.” “In addition, the company has developed a plan to address each of BaFin’s concerns, as shown in the audit report. Currently, Coinbase has made significant progress toward this plan.”
BaFin’s statement shows that the audit of the yearly financial information depicts enterprises’ shortcomings at the agency. However, the report concluded that the regularity of the organization in question is only included in some of the audited parts.
BaFin granted Coinbase Germany its crypto custody and trading license in July 2021 to provide digital financial services to the country.
Coinbase Ramps Up Oversea Expansion
The US-based crypto exchange is eyeing a global expansion to keep up with other players like Binance. Coinbase announced on October 11 that it had been approved by the Monetary Authority of Singapore (MAS) to provide regulated digital token products and services in the country.
The regulatory approval comes amid the broader crypto market bloodbath, with the vast majority of assets dropping a significant part of their value. Moreover, the spillover from the collapse of substantial crypto projects and bankrupt firms across the industry has led to massive losses.
Coinbase appears undeterred by the current market direction and continues to set up a base worldwide. Since last year, the company has identified Singapore as one of its investment hubs. The Island nation also serves as a Coinbase business launch pad for international investors in Asia.
Coinbase is excited about the MAS approval. It sees it as a crucial step toward its drive to launch retail and institutional crypto products.
Despite the central bank’s warning about the risks associated with trading in speculative assets like cryptocurrency, Singapore has established structures to attract foreign crypto exchanges to set up shop.
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