BaFin, the main financial regulator, operating in Germany, has recently issued a directive for the German office of Coinbase for compliance. The German regulator has ensured that cryptocurrency organizations should pay heed to the regulatory requirement issued by the national bank.
As per the local media outlets, German regulators have found discrepancies in compliance with risk and capital requirements.
As per the decree of BaFin, Coinbase is advised to take necessary steps to avoid any further violation of the German Banking Act. The regulator has directed Coinbase to focus its attention on the regulatory guidelines related to risk and capital laws.
BaFin Asks Coinbase to Address Deficiencies
BaFin has further added in its latest assessment of Coinbase that it should make arrangements for increasing efficiency in the areas like internal capital correction.
Another aspect highlighted by BaFin officials is that the cryptocurrency organization needs to do more work on building a solid risk management strategy and ensuring sustainable development.
On the other hand, the financial regulator has also ensured that the company’s updates are going to be reviewed in the form of an update of its annual audit report. The Bank Act that the German government wishes to enforce has been enacted since October 27th this year.
Coinbase officials have taken notice of the guidelines issued by the BaFin and have issued a positive response. As per media reports, Coinbase is eager to comply with the regulatory guidelines and has also informed its German user base that a redemption plan is underway to address the matter.
Furthermore, the cryptocurrency organization has also resolved to submit a self-audit report for BaFin once the plans have been implemented.
Meanwhile, BaFin officials have claimed that the financial agency found inconsistencies in Coinbase records following a review of its annual financial reports. Coinbase acquired its trading certification from BaFin in 2021.