The idea to punish offenders with fines and prison stirs Poland’s crypto community.
Anyone providing crypto services without permission may spend time in prison, on top of a hefty fine, according to a draft provision put forward by lawmakers in Poland.
The proposal comes ahead of a second reading of the country’s upcoming cryptocurrency legislation that has already drawn serious criticism for threatening the survival of domestic platforms.
Dealing with cryptocurrencies may soon become a risky undertaking in Poland, where a proposed legislative amendment seeks to hit unlicensed crypto operations with monetary penalties and even prison sentences.
The new provision, suggested by three parliamentarians from the center-right conservative Civic Platform party, may completely block the development of the Web3 sector, leading Polish crypto news portal Bitcoin.pl warned in a report on Monday.
The text, submitted by Joanna Frydrych, Dorota Marek and Krystyna Skowrońska, reads:
“Whoever, without being authorized to do so, conducts activities related to the provision of services in the field of crypto assets … shall be subject to a fine of up to PLN 5,000,000 or imprisonment for up to 5 years, or both.”
The total in Polish złoty, equal to nearly $1.4 million, is a massive amount for small local crypto businesses. The other potential punishment is also very harsh. Prison sentences cannot be shorter than 6 months, the article highlighted.
The Sejm, the lower house of parliament in Poland, approved the bill on first reading earlier this summer and referred it to the Public Finance Committee for further refinement.
The long-awaited legislation seeks to transpose the European Union’s new rules under the Markets in Crypto Assets (MiCA) regulation into national law. Both have been already criticized by members of the Polish crypto community.
In August, a report predicted that MiCA compliance costs will close down up to 90% of exchanges in the country, Eastern Europe’s largest crypto market. They may have to spend up to 3 million złoty (around $800,000) on obtaining a license alone.
Representatives of the crypto sector have complained that the draft law goes even beyond the MiCA standards. One of the debated proposals was to impose a 0.5% fee on the revenues of domestic coin trading platforms, which is not required by the EU.
Besides the crypto industry, opposition politicians have also attacked the government’s regulatory move. Among them, Law and Justice party lawmakers Janusz Kowalski and Michał Moskal, who recently proposed to cap the licensing fee at €10,000 (less than $12,000)
Poland’s newly elected President Karol Nawrocki, who assumed office last month, is expected to veto the law if it’s adopted in its current form, as previously reported by Cryptopolitan.
Commenting on the latest addition to the draft, Polish economist Prof. Krzysztof Piech alleged that the new provision can result in strange situations, when people who simply train their friends to work with cryptocurrencies are punished.
It can also prevent stores from accepting crypto payments or Polish artists from issuing non-fungible tokens (NFTs), noted the prominent academic who focuses on finance.
Piech, who is the head of the Blockchain Technology Center at Warsaw’s Lazarski University, was also quoted as stating:
“This regulation is a legal nightmare. It uses a nuclear weapon designed to combat large, unlicensed exchanges and targets ordinary people with it – hobbyists, artists, lecturers, and small entrepreneurs.”
Introducing a minimum prison sentence for acts, the “criminal” nature of which is often the result of ignorance and unclear definitions (and lack of money for lawyers), is a hallmark of totalitarian systems, “not a rule of law,” he insisted.
According to Jacek Walewski, the author of the article and an organizer of public crypto consultations at the Sejm, it’s hard to understand what Polish politicians want.
“Their ideas for regulating the cryptocurrency market in Poland are becoming increasingly bizarre! It’s as if MPs want to discourage Poles from using cryptocurrencies,” he concluded.
