Polish fintech company Cinkciarz.pl (Conotoxia) sparked controversy this week after announcing plans to transform into a joint-stock company and pursue a banking license, drawing immediate pushback from Poland's financial regulator, KNF.

Cinkciarz.pl’s Banking Pivot Draws Regulatory Warning

The currency exchange platform, which has recently faced operational challenges, revealed its strategic transformation amid reports of customer payment delays. The company plans to convert from a limited liability company to a joint-stock structure while simultaneously preparing banking license documentation.

The move comes more than a month after KNF revoked Conotoxia sp. z o.o.'s, one of fintech ’s subsidiaries operating in Poland, payment services license.

“The transformation will strengthen our financial stability and open up new business opportunities,” Cinkciarz.pl stated in its initial announcement. The company emphasized that obtaining a banking license would provide customers with deposit protection through a bank guarantee fund.

However, Poland's KNF quickly challenged these claims, stating that neither Cinkciarz.pl nor its affiliated entities had filed any applications for a domestic banking license. The regulator warned that suggesting a swift licensing process could mislead customers about both the timeline and potential outcomes.

“Cinkciarz.pl and its associated entities have not applied to the KF for authorization to establish a domestic bank, and as a result, the KNF is not conducting any proceedings that could lead to such an authorization,” the regulator commented. “Cinkciarz.pl may mislead recipients.”

As the KNF explains, the regulatory requirements for establishing a new bank in Poland include a minimum capital requirement of €5 million and a multi-stage approval process. Any new bank must also contribute to the Bank Guarantee Fund before commencing operations.

Cinkciarz.pl “Grills” KNF (Again)

In response to KNF's criticism, Cinkciarz.pl clarified that it was exploring multiple pathways to obtain a banking license, including potential mergers, acquisitions, or banking-as-a-service partnerships. The company also emphasized that its banking ambitions extend beyond Poland to the broader European Union.

“The KNF's interpretation of our communications is clear evidence of the difficulty in reading documents with understanding,” Cinkciarz.pl added in harsh words. “This is a further argument for the need to restructure the KNF to ensure a consistent, transparent, and fair operation.”

This is not the first time Cinkciarz.pl has shown a lack of “diplomacy” in its official statements. Previously, it suggested that the KNF “violates the law” and that regulations, rather than supporting businesses, “destroy” companies. The fintech has also accused the entire Polish banking sector of “conspiracy” against fintech competition and intends to sue 11 of Poland's largest financial institutions for a total currently exceeding 6.75 billion zlotys ($1.65 billion).

At the end of last month, the company disclosed it was in “advanced talks” with international investment funds, seeking ways to stabilize its operations following the loss of its license.

It’s worth noting that Conotoxia Ltd, the Cyprus-based entity responsible for CFD trading, remains unaffected by the license revocation.

“Our company Conotoxia Ltd is a separate entity that holds a license to conduct brokerage activities in Poland, among other places,” Grzegorz Jaworski, CEO of Conotoxia Ltd, commented in the emailed statement.