The Polish financial technology company recently stripped of its payment services license, Conotoxia Sp. z o.o. (part of Cinkciarz.pl), announced today (Tuesday) a settlement plan promising full refunds with interest to affected customers, as it works to resolve the fallout from regulatory challenges.

Conotoxia Pledges Full Customer Refunds by Year-End, Currently 60%

The company has returned approximately 60% of customer deposits and aims to complete all remaining refunds by December 31, 2024, the deadline set by the Polish Financial Supervision Authority (KNF).

"We fully understand customers' concerns regarding the return of funds for their currency exchange transactions," stated Conotoxia in its announcement. "We process refund transfers on a daily basis."

The company emphasized that signing the settlement agreement is optional and primarily targets customers seeking additional security for their repayments. “We believe this arrangement will save time, avoid unnecessary legal fees and minimise the stress associated with the repayment process,” the company added.

The settlement proposal, which will be available to customers through their online profiles next week, guarantees complete reimbursement of entrusted funds plus statutory interest for the waiting period.

This development comes in the wake of KNF’s October 2 decision to revoke Conotoxia's payment services license, which sparked concerns among the company's substantial customer base. The settlement initiative appears to be part of a broader strategy to maintain customer confidence and ensure an orderly resolution of outstanding obligations.

“We sincerely apologize for the delays and guarantee that we are committed to resolving the problem,” the company concluded.

Cinkciarz.pl Takes KNF to Court

Also this week, Cinkciarz.pl has initiated legal proceedings against KNF, following the revocation of its operating license. The fintech contends that the decision, rather than safeguarding customer interests, could undermine them. The case centers on the KNF's recent objection to Conotoxia's use of bank accounts owned by its agent, Cinkciarz.pl, to manage customer funds—a practice the company claims the regulator had tolerated since 2017.

The dispute between Conotoxia and the KNF has been escalating for over a month. The fintech has accused the KNF of "violating the law" and jeopardizing its business operations. Meanwhile, the regulator has issued a negative recommendation concerning Conotoxia's efforts to obtain a European banking license, which the company deems critical for sustaining its activities.

Conotoxia also wants to launch lawsuits against nearly all major banks in Poland, alleging "conspiracy" to obstruct its operations. The legal claims could target 11 entities, with damages amounting to 6.75 billion zlotys ($1.65 billion). In parallel, the fintech has announced plans to attract foreign investment to stabilize its operations. Nearly a month ago, the company disclosed that it was in advanced discussions with an investment fund, which could provide crucial financial support.

As Conotoxia navigates these challenges, its legal battles and efforts to secure a European banking license remain pivotal to its strategy for overcoming regulatory and operational hurdles.