The Federal Financial Supervisory Authority (BaFin) announced on Tuesday that the crypto exchange‘s German branch violates the German Banking Act, i.e.. the sections that require the maintenance of high risk-bearing capacity, the steady operation of emergency management mechanisms, and adequate staffing practices. Deficiencies in Coinbase’s annual crypto finances audit statements have become the reason for BaFin to order Coinbase to provide a “proper business organization” model. Coinbase has officially confirmed that the company will cooperate to its fullest extent on these issues. Additionally, Coinbase claims that it has devised a “remediation plan” that will address all the audit concerns raised by BaFin.
It also announced that its crypto-based activities would be moved out of the US exchanges and into the international market, including Europe and Singapore, which recently granted the exchange a license to operate. A BaFin license was just granted last year.
Coinbase is headquartered in California and is one of the largest cryptocurrency exchanges on the global scene. However, recently the exchange has been impacted by the stagnation of the crypto market. The company reportedly lost $1 billion in the second quarter of 2022, and $545 million in the third. Its revenue also dropped to $576 million in the third quarter of 2022.