- The lower chamber of Poland’s parliament voted to advance Bill 1424, otherwise known as the Crypto-Asset Market Act.
- Crypto advocates in the legislature heavily criticized the restrictive and harsh provisions of the bill.
Poland’s Sejm, the lower house of the country’s parliament, reportedly advanced the Crypto-Asset Market Act. However, the stringent licensing and penalties sparked outrage from the Polish crypto community.
Poland’s Crypto-Asset Market Act
According to the Sejm’s official website, the Council of Ministers introduced Bill 1424 as a government-drafted bill last June 26. It passed the first reading in July, followed by its second and third readings on September 24 and 26, respectively.
The initiative designates the Komisja Nadzoru Finansowego (KNF), the country’s financial watchdog, as the primary regulator of the nation’s crypto industry. It also requires domestic and foreign Crypto Asset Service Providers (CASPs) to register and obtain a license from the regulator before operating within the jurisdiction.
In doing so, covered businesses must submit to the regulator their comprehensive application, detailing their corporate structure, capital adequacy, internal controls, compliance systems, risk management mechanisms, and anti-money laundering (AML) measures.
The Sejm passed the Crypto-Asset Market Act by a narrow margin, with 230 votes in favor and 196 votes in opposition. It’s now bound to the Senate, where it will undergo further deliberations, adoption without any changes, or complete rejection. If the upper house introduces amendments to the bill, it will be returned to the Sejm.
Upon completing the legislative proceedings, the Marshal of the Sejm submits the adopted bill to the president. The president has up to 21 days to sign the bill into law or veto it.
Major Oppositions to the Bill
Crypto advocates in the legislature, with the support of the crypto community, reacted negatively to the provisions of the bill. A key point of contention lay in its restrictive rules, particularly the harsh fines for violations. People could face up to two years of prison term and fines of around 10 million Polish zlotys ($2.8 million) for each violation of the regulations.
Janus Kowalski, a member of the Sejm, strongly opposed the bill. He claimed it would serve as a significant burden to over 3 million Poles who own crypto.
In addition, Kowalski found the 118-page bill to be “overregulation,” which could curtail innovation and discourage crypto-related businesses from operating in the country. He compared the voluminous provisions of the proposed law to the more streamlined and less restrictive provisions of other countries in the EU, like Cyprus’s one-page legislation and Germany’s 78-page legislation.
Furthermore, Tomasz Mentzen, another crypto advocate and politician in Poland, criticized the bill as destructive to the nation’s digital assets and blockchain space. He also threw shade at the KNF’s slow pace in acting on applications, with its average processing time allegedly lasting up to 30 months.
The opposition urged the Senate and President Karol Nawrocki to reject the passage of the legislation to protect the interests of Poland’s crypto sector.
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