It seems not, remember this is a digital currency, not currently regulated or within a regulatory framework in Cyprus - something Danny was desperately seeking. So it would have been banking in a grey-area and completely possible. That was the whole aim of the company afterall and they hadn't been shut down or told they would be as far as we know.
Maybe I am wrong, but I recall that their plan was to offer bank-like savings accounts combining euros and bitcoins in some way.
If they were planning to take euros from clients, shouldn't they fall in the scope of the bank regulations? One cannot evade regulations simply by using a different name for the business....