Regulator flags shortcomings in Coinbase’s German subsidiary

The Federal Financial Supervisory Authority of Germany (BaFin) issued an order to Coinbase’s unit to “ensure proper organisation of the business”.

The regulator cited breaches of the Banking Act, noting two sections in the order.

They relate to risk management, adequate internal capital, a clearly defined internal structure with a division of responsibilities, the remuneration system, and other principles of sustainable development.

“Coinbase commits to comply with all legal requirements within this regulatory regime. We are fully cooperating, seeking to incorporate the findings of the annual audit report,” commented a spokesperson for the exchange to The Block.

He added that the company had developed a plan to address the deficiencies, taking into account all of BaFin’s remarks.

“Coinbase regards regulation as a factor conducive to business development, and the process of implementing certain BaFin measures has already begun,” the company said.

In June 2021 the exchange obtained a licence from the German regulator to provide cryptocurrency custody services.

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