In a significant move marking a shift in its cryptocurrency landscape, Poland’s lower house of parliament, the Sejm, has recently passed a comprehensive bill aimed at regulating the crypto asset market. This legislation, known as the Crypto-Asset Market Act (Bill 1424), introduces stringent restrictions and lays the groundwork for a dedicated supervisory authority to oversee operations within this sector.
The measure received a favorable vote from 230 members against 196, paving the way for further deliberation in the Senate. Pursuant to this regulatory framework, crypto asset service providers (CASPs), which encompass exchanges, issuers, and custody services, will be mandated to acquire a license from the Polish financial supervision authority, known as the Komisja Nadzoru Finansowego (KNF).
One of the most noteworthy aspects of the legislation is the imposition of criminal liability for breaches of its stipulations. The bill outlines penalties including hefty fines that could reach up to 10 million Polish zlotys (approximately $2.8 million) and potential prison sentences of up to two years. Critics have voiced strong concerns regarding these provisions, arguing that they could stifle innovation and hinder growth within Poland’s crypto sector.
Beginning a transition period of six months is essential for CASPs, which will be required to submit detailed applications showcasing their corporate structure, compliance systems, internal controls, and risk management policies to obtain the necessary licensing. Critics warn that failure to comply may result in severe operational limitations or even shutdowns for non-compliant businesses.
The backlash against the bill has been palpable, with various stakeholders in the crypto community expressing their discontent. Janusz Kowalski, a member of the opposition Law and Justice (PiS) party, has argued that the bill represents the “most oppressive cryptocurrency law in the EU,” criticizing its lengthy format of 118 pages in contrast to more concise regulations in other member states. Kowalski warns that the law threatens to harm Poland’s robust community of three million cryptocurrency enthusiasts.
Furthermore, Tomasz Mentzen, a politician and blockchain advocate, has raised alarms about the implementation timeline. Highlighting the KNF’s efficiency challenges, he stated that the authority is known for having the slowest application processing times in the EU, averaging around 30 months. He characterized the Sejm’s approval of the legislation as a potential disaster for blockchain innovation and the stablecoin sector in Poland.
Encouragingly, Poland’s President Karol Nawrocki has previously pledged his support for the crypto industry, emphasizing the need to curb excessive regulations that impede freedom and innovation. Prior to his election, Nawrocki indicated his intention to foster a more accommodating environment for crypto endeavors during his presidency.
As the bill moves to the Senate for further evaluation, industry stakeholders remain on edge, advocating for a reassessment of its restrictive measures. With Poland’s crypto market hanging in the balance, the upcoming legislative discussions will be crucial in determining the future landscape of crypto regulation in the country.
