The law is causing political turbulence in Warsaw, with warnings about the future of the market.
The Polish parliament has finally approved a government-proposed crypto bill that has become the focal point of a heated political clash with the head of state and the opposition.
The legislation, strongly criticized by the industry as a threat to domestic crypto business, has been pushed through after an earlier attempt to overturn President Karol Nawrocki’s veto failed.
The Sejm, the lower house of parliament in Poland, has adopted the country’s new Crypto-Asset Market Act, local media reported.
On Thursday, the comprehensive framework was backed by 241 members of the chamber, out of a total of 425 deputies participating in the vote.
This was the second reading of the bill, which took place after Karol Nawrocki returned it to the legislature in early December. It was initially passed in September.
The first try to override the president’s veto was unsuccessful as the parties forming the ruling coalition were unable to provide the three-fifths majority needed to achieve that.
The legislation is supposedly designed to transpose the EU’s latest Markets in Crypto Assets (MiCA) regulations into national law.
However, the country’s crypto community is warning that it goes far beyond the European requirements, threatening the very survival of Polish platforms. Many of them are expected to exit what’s now arguably Eastern Europe’s largest cryptocurrency market.
In his motives for the veto, Nawrocki added his own concerns, including regarding the personal and economic freedoms of Poles and the very stability of their state.
The pro-EU government of Prime Minister Donald Tusk returned fire by accusing the president of involvement in a “crypto affair” and “weird relationship” with the industry.
After the first failed attempt to overturn the veto of the recently elected nationalist head of state, Tusk portrayed the adoption of the legislation as a matter of national security.
Addressing the Sejm during a partially closed-door session, he alleged that Poland’s crypto sector has been infiltrated by over a hundred foreign entities, many from Russia, Belarus and other former-Soviet states.
Quoted by Polish media and Bloomberg, he insisted that his cabinet’s draft gives Warsaw “tools to control a new market, which is not regulated, where the Russian services, Russian mafia and money laundering are present.”
Cryptocurrencies have been used by Moscow to finance subversive actions in the country and to circumvent Western sanctions imposed over its invasion of Ukraine, he claimed, adding that Nawrocki’s stoppage was serving the interests of Putin’s regime.
Members of Tusk’s cabinet indicated they are resubmitting the bill to parliament without any major changes, and the Premier himself turned directly to the president with a “Please, do not disturb” appeal, as quoted by a leading Polish crypto news outlet.
The approved legal document, which contains more than 100 pages of new provisions, is not merely a transposition of European law, Bitcoin.pl noted after the Sejm’s vote, elaborating in an article:
“It is primarily a strict regime of penalties and transferring full control over the industry to the Polish Financial Supervision Authority.”
The watchdog, abbreviated KNF in Polish, “receives the tools it could only dream of until now: the ability to suspend the activities of platforms, impose financial penalties reaching millions of zlotys and control every move on the crypto-asset market,” the portal added.
It also suggested that Polish crypto exchanges, brokers and blockchain projects should now prepare for a new era of government bureaucracy, including capital, licensing, and reporting requirements.
“The list of responsibilities is growing at an alarming rate,” the crypto-focused website remarked, issuing another stark warning:
“Smaller companies may simply not survive this regulatory wave. Big players will adapt, pay the bills and keep playing. But how many startups and innovative projects will fall before they get the right license?”
The Crypto-Asset Market Act is sowing division among representatives of the sector as well. Some insist that MiCA will bring necessary standardization and protection for investors.
Others say its Polish interpretation will suffocate innovation and chase businesses away to friendlier jurisdictions such as Malta or the Baltics.
The publication highlights that the crypto law has become the main cause for skirmishes on the battleground of Polish politics in recent weeks, with PR often blurring the important matter. It believes Karol Nawrocki is likely to once again halt Tusk’s legislation.
