The Warsaw Administrative Court recently upheld a decision by the Polish Financial Supervision Authority to revoke a payment services license held by a fintech company. This ruling reflects a continuation of a complex regulatory issue surrounding the firm’s compliance with established guidelines.
The court’s decision, finalized on March 5, affirmed the KNF’s earlier finding that the company failed to meet crucial licensing requirements and neglected statutory obligations regarding the protection of funds from payment service users. The ruling emphasized that the KNF had thoroughly assessed the situation and addressed all arguments presented by the company.
In response, the fintech expressed strong disagreement with the court’s ruling, framing it as indicative of a broader crisis within the Polish legal system. The company’s representatives criticized the court’s ruling for being superficial and accused the KNF of numerous violations in its procedural approach, particularly citing a lack of communication regarding collected evidence that could have allowed for an adequate defense.
Furthermore, the fintech company criticized the KNF for overreaching its authority by implementing additional obligations not stated in the relevant law, labeling such actions as unlawful. The firm pointed to past controversies involving the KNF and expressed concern over a supposed protective network among state authorities, arguing that this undermines accountability.
The fintech announced plans to escalate the matter to the Supreme Administrative Court, highlighting that the legal battle is far from over.
Amid these legal disputes, the company appears to be facing growing dissatisfaction among its customers, leading to claims that many clients are seeking compensation for blocked funds. A significant number of alleged victims has emerged, with reports indicating approximately 1,200 individuals affected.
Despite being unable to process currency exchanges due to restrictions imposed by banks, the fintech has reportedly continued to remind customers of their obligations regarding payment for unsuccessful transactions. The company maintains that such obligations remain valid, regardless of external limitations placed on transactions.
In a surprising twist, the fintech announced an unusual pivot from currency exchange to producing toilet paper, stating such an endeavor wouldn’t require regulatory approval. They humorously positioned the product with large lettering featuring the acronym for the KNF, which they claimed stood for “I love finance,” but many interpreted it as a mockery of the regulator.
This ongoing saga reflects a challenging landscape for fintech firms operating under the supervision of financial authorities, as they navigate complex regulatory environments, customer expectations, and operational constraints. The implications of these developments are likely to be significant, not only for the firm but also for the broader fintech sector in Poland.