Polish
fintech Conotoxia Sp. z o.o., operating the currency exchange brand
Cinkciarz.pl, is contesting a decision by the Polish Financial Supervision
Authority (KNF) to revoke its payment services license. It is alleging procedural
irregularities and harmful impacts on customers.

Polish Fintech Conotoxia
Challenges Regulator’s Decision to Revoke License

The KNF
announced on October 2 that it had unanimously
revoked Conotoxia’s license, citing concerns about the company’s management
of payment services. However, Conotoxia claims it was not properly notified of
the decision or given an opportunity to review case files and present its
defense.

In an
official statement, the company clearly states that “KNF violates the
law” and “acted to the detriment of users.” As suggested by the
statement, Conotoxia aims to fight against the “current banking
lobby,” which protects its own interests by prioritizing them over the
interests of users and competing fintech entities.

“The KNF violated the provision of Article 105(1)(6) of the Payment Services Act. Given a choice of six supervisory measures against a Company with no previous administrative penalties, it decided to wind it up straight away, a phenomenon in supervision that should help entities solve their problems, not destroy them,” the company commented in another of
the series of statements made in recent days.

“How the
KNF’s decision was disclosed online created an unjustified market panic and
Inquisition-like judgement over the entire capital group. No financial
institution can withstand such pressure.”

Last week, Cinkciarz.pl
also declared war on Polish banks by announcing plans to sue six of them
for at least 3 billion zlotys ($750 million) in compensation for an alleged
collusion aimed at restricting access to the currency exchange market.

The fintech
argues the banks’ and the regulator’s actions have caused unwarranted market panic
affecting not just Conotoxia Sp. z o.o., but other entities in its holding
group. It estimates potential damages to merchants using its services could
reach billions of zlotys due to disruptions.

Conotoxia
also highlighted concerns about the impact on its approximately 100,000 active
multi-currency card users, who will lose access to their cards on October 17.
“Many of our customers are abroad (work, medical treatment, holidays)—being cut off from the payment card operation could have unimaginable and
irreversible consequences,” the statement added.

The fintech
firm plans to challenge the KNF’s decision through legal channels. It has
deliberately delayed formally receiving the decision until October 16 at 23:59,
the latest possible time, in an effort to protect customers.

Conotoxia Ltd is Not the
Same as Conotoxia Sp. z o.o.

Cinkciarz.pl
and Conotoxia operate under several subsidiary companies with similar names,
which can create some confusion. While the KNF has revoked the domestic payment
institution license of the Polish branch, the license issued by Cyprus for
conducting CFD transactions remains unaffected. Finance Magnates learned
that due to the similarity in names, the Cypriot regulator has also reportedly
taken interest in the situation.

Grzegorz
Jaworski, CEO of Conotoxia Ltd, a broker licensed by CySEC , addressed the
matter in a letter sent last week to “clients, contractors, business
partners, and media,” emphasizing that the recent actions by the KNF did
not involve the company he represents.

“Our
company Conotoxia Ltd is a separate entity that holds a license to conduct
brokerage activities in Poland, among other places,” Jaworski stated. “Our
company does not and has never provided any payment services to clients and has
nothing to do with the Polish Financial Supervision Authority’s decision
regarding Conotoxia sp. z o.o.”

He added
that this decision does not impact the operations or the safety of client funds
at Conotoxia Ltd in any way.