Lawmakers in Poland have approved a new bill designed to regulate the crypto industry in the country in line with the latest European Union standards. The Sejm, the lower house of the Polish parliament, adopted the new law to implement the European Union’s Market in Crypto Assets (MiCA) regulations in the country.
However, critics are saying that the legislation goes beyond European requirements, drumming up controversy within the crypto community and in Polish politics. The regulation, which has been in the works for a while, aims to impose order in the crypto space in Poland, which is seen as one of the largest in Central and Eastern Europe.
Poland passes crypto law amid concerns over excessive regulations
The newly approved crypto law has been criticized for attempting to overregulate the nation’s crypto industry, stifling innovation and threatening to kill the business of domestic firms that work with digital assets. On Friday, 230 members of the chamber voted in favor of the bill, another 196 rejected it, with no abstentions. The Crypto Assets Act will now go to the Senate, the upper house of parliament in Poland.
The government-sponsored law should ensure protection for customers and other market participants from what has been described as “dishonest entities,” the Polish PAP news agency reported. It introduces criminal liability for certain violations, such as the provision of crypto services and the issuance of digital tokens without authorization, and defines the obligations of approved platforms.
The law also mentioned that the Financial Supervision Authority in Poland will be tasked with supervision of the sector, as the body will be equipped with the needed resources to conduct its activities. The KNF will be responsible for registering violations of the new rules and fraudulent activities involving operations with cryptocurrencies. Perpetrators of the most serious offences will face harsh penalties, including fines of up to 10 million Polish złoty ($120,000) and even imprisonment for up to two years.
However, the long-awaited legislation was not accepted well by members of the country’s crypto community and the parliamentary opposition, who criticized it throughout its review in the Sejm. While transposing MiCA into national law “sounds innocent,” the crypto act is a “real horror” for crypto entrepreneurs, the crypto news outlet Bitcoin.pl wrote in an article on Saturday.
Highlighting some of the powers granted to Poland’s financial regulator, which confused the industry on the weekend, the Polish portal commented: “The crypto assets law gives the KNF permissions that resemble a repression apparatus rather than market supervision.” They come with “fees, which can simply finish smaller companies, and the “clear guidelines” are just restrictions and costly requirements that will suffocate innovation.
The website also said, “This law can deal a fatal blow to domestic companies operating in the crypto sector.” Meanwhile, the exodus of crypto exchanges from Poland may soon start as firms have started hinting at leaving. For example, XTB, one of the largest crypto exchanges in Poland, has signaled that it may seek a license in Poland. In addition, Jakub Bartoszek, the president of Cashify, noted that the Polish implementation of MiCA is one of the most extensive, imposing high entry costs and increasing barriers.
