The Warsaw Administrative Court recently upheld the Polish Financial Supervision Authority’s (KNF) decision to revoke Conotoxia’s payment services license, adding a new chapter to the ongoing regulatory issues faced by the fintech company. In a swift response, the firm has announced its intention to appeal the ruling to the Supreme Court, expressing dissatisfaction with both the court’s decision and the judicial process.
On March 5, the court reaffirmed the KNF’s October decision, which was based on findings that Conotoxia no longer met crucial requirements for maintaining its authorization as a domestic payment institution. The court indicated that the KNF had thoroughly evaluated the reasons for revoking the license and adequately addressed the firm’s arguments throughout their administrative proceedings.
According to the regulator, the investigation revealed that Conotoxia failed to comply with statutory obligations meant to safeguard the funds of payment service users. This breach was deemed a potential threat to the interests of its clients.
Conotoxia, however, strongly contested the court’s ruling, framing it as evidence of a significant failure within Poland’s legal system. The company expressed concern that the court did not properly engage with the arguments they presented, particularly regarding alleged procedural violations by the KNF.
In a pointed critique of the bureaucrat’s actions, a representative of Conotoxia accused them of acting above the law and beyond state control. The company asserted that it had not been properly notified of evidence collected against it and had been deprived of a chance to respond prior to the KNF’s decision. Furthermore, Conotoxia alleged that the KNF had exceeded its authority by imposing requirements not specified in existing regulations.
The fintech’s representatives contended that the court’s dependency on a seemingly standard perception of the professionalism of the KNF was misplaced, pointing out previous controversies surrounding the authority. They indicated a pattern of mutual protection among state authorities, which they argued leads to a lack of accountability.
The company has committed to escalating the matter by filing a complaint with the Supreme Administrative Court, suggesting that this legal dispute is far from its conclusion.
Moreover, the situation surrounding Conotoxia resembles an ongoing saga with numerous layers of complexity. The fintech has taken legal steps against various Polish banks, claiming they have been wronged significantly, though it remains unclear if these cases have proceeded to trial. In a twist of events, the firm has also claimed that no action has been initiated against the KNF by the prosecutor’s office, despite earlier assertions to the contrary.
Compounding the situation, a notable number of dissatisfied customers have emerged, indicating they wish to retrieve their lost funds. Reports indicate around 1,200 alleged victims and blocked business accounts, as a case has developed and continues within the prosecutor’s office.
Amid these challenges, Conotoxia has faced difficulties in currency exchanges due to restrictions imposed by banks, which have frozen transaction attempts. Despite these obstacles, the firm has reportedly continued to bill customers for transactions that it is currently unable to fulfill.While maintaining that clients consented to the transaction terms, Conotoxia attributes the inability to execute these agreements to external state interventions rather than any wrongdoing on its part.
In a rather surprising move, the company has announced plans to pivot towards producing toilet paper, humorously suggesting that such a venture would not require the same regulatory authorizations and would feature packaging adorned with the letters “KNF,” ostensibly mocking the financial authority.
In light of this series of events, it is clear that the regulatory landscape is becoming increasingly tumultuous for this fintech firm, and its future actions will be closely observed as it continues to navigate these choppy waters. As the company pursues various legal avenues, the outcome of its appeals may hold significant ramifications not only for Conotoxia but also for the oversight role of the KNF in Poland’s financial environment.