The German subsidiary of US cryptocurrency trading firm Coinbase Global Inc has been ordered by the Federal Superintendence of Financial Supervision known as BaFin to ensure that it achieves proper business organization.

The order that took effect at the end of October was made necessary as the regulator said it found a number of inconsistencies in some aspects of the company’s operations when it audited its financial statements.

BaFin specifically pointed out that Coinbase is directly violating the standards set by the German Banking Law.

The press release issued by the regulator made reference to Section 25a(1) of the Act, a provision that requires companies to maintain adequate risk management procedures. In addition, the section of the law also requires companies labeled as GmbH to maintain adequate staffing, as well as to establish adequate emergency processes surrounding their information technology system and employee remuneration.

“An audit of the annual financial statements revealed organizational deficiencies at the institute. The regularity of the business organization was not given in all the audited areas, ”said the regulator in his statement.

Germany remains one of the countries with strong and clear regulations for the cryptocurrency ecosystem.

Despite its positive leanings towards the crypto ecosystem, Germany has maintained a cautious stance alongside other economies in a bid to shield investors from the uncertainties that are tied to the nascent crypto ecosystem, as evidenced by the collapse of many crypto heavyweights. crypto, including Celsius Network, Voyager Digital, and Three Arrows Capital (3AC) among others.

Coinbase was licensed by BaFin to provide custody-related services last year, marking one of the exchange’s ambitious pushes toward the European Union. With the significant correction of its internal controls and risk management measures, Coinbase Germany will have to heed BaFin’s directives in a bid to continue serving its customers in the country.

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