tl;dr
Poland's new Crypto Assets Act, aimed at aligning with EU regulations, has ignited fierce debate over its strict measures and potential to stifle crypto innovation, with critics warning of a 'repression apparatus' and businesses threatening to flee the country.
**Poland’s Crypto Regulation Sparks Controversy: Balancing Innovation and Oversight**
Poland’s parliament has passed a contentious new law aimed at regulating the country’s cryptocurrency market in line with European Union (EU) standards, but the legislation has ignited fierce debate over its potential to stifle innovation and harm domestic firms. The *Crypto Assets Act*, approved by the Sejm (lower house of parliament) with a 230–196 vote, seeks to implement the EU’s Markets in Crypto Assets (MiCA) regulations, which were designed to create a unified framework for crypto oversight across member states. However, critics argue that the law goes far beyond what is necessary, imposing excessive restrictions that could undermine Poland’s position as a hub for crypto innovation in Central and Eastern Europe.
### A Heavy Hand on Crypto Regulation
The bill, which now moves to the Senate for final approval, introduces stringent measures to protect investors and combat fraud. Under the law, the Polish Financial Supervision Authority (KNF) will oversee the sector, with the power to register violations, investigate fraudulent activities, and enforce penalties. Offenses such as operating crypto services without authorization or issuing unapproved digital tokens could lead to fines of up to 10 million Polish złoty ($120,000) or even two years in prison for the most severe violations.
Online cryptocurrency exchanges will also face heightened scrutiny, including requirements to maintain individual client accounts to safeguard user funds. The government claims these measures are essential to address the 20% of crypto investors in Poland who have reported experiencing fraud or abuse, as highlighted by Deputy Finance Minister Jurand Drop. “The lack of mechanisms to fight fraud is a critical issue,” he stated, emphasizing the need for stronger investor protections.
### Critics Warn of Overreach and Innovation Loss
Despite the government’s rationale, the legislation has drawn sharp criticism from the crypto community, entrepreneurs, and opposition lawmakers. Bitcoin.pl, a leading Polish crypto news outlet, called the law a “real horror” for entrepreneurs, arguing that it grants the KNF powers resembling a “repression apparatus” rather than a regulatory body. The platform highlighted provisions such as costly compliance fees and restrictive guidelines that could disproportionately burden smaller firms, potentially driving them out of the market.
Jakub Bartoszek, president of the crypto exchange Cashify, warned that Poland’s implementation of MiCA is among the most extensive, creating “high entry costs and multiplied barriers” for businesses. He urged Polish President Karol Nawrocki, who took office in August, to veto the law in its current form, citing concerns about its impact on innovation. Some firms, like XTB—a major Polish broker—have already signaled plans to seek licenses in Cyprus, hinting at a possible exodus of crypto companies from the country.
### The Broader Implications
With 18% of Poles having invested in crypto assets, as reported by Cryptopolitan, the law’s success in balancing oversight and innovation will have significant consequences for Poland’s digital economy. Proponents argue that strict regulations are necessary to build trust and prevent the sector from falling into the hands of “dishonest entities.” However, opponents fear the legislation could deter startups, limit competition, and push talent and capital abroad.
As the Senate prepares to review the bill, the debate underscores a broader tension across the EU: how to regulate emerging technologies without stifling the very innovation they aim to protect. For Poland, the outcome of this legislation will likely shape its role in the global crypto landscape for years to come.
With President Nawrocki’s potential veto and ongoing political pressure, the future of the *Crypto Assets Act* remains uncertain. Yet one thing is clear: the battle over how to govern the digital frontier is far from over.