The Polish Financial Supervision Authority (KNF) has been granted new powers to tighten regulations in the crypto market, ahead of the EU’s MiCA rules. MiCA, or the Markets in Crypto Assets Regulation, is the EU’s comprehensive crypto law that will come into effect this year.
Under the new powers, KNF can independently block crypto accounts for up to 96 hours if any issues arise. However, if there’s suspicion of criminal activity related to the funds, the blocking period can be extended up to 6 months with the consent of the prosecutor’s office.
This increased oversight comes as Poland prepares to align its crypto guidelines with MiCA. MiCA aims to regulate the issuance and trading of digital assets and provide legal clarity for businesses.
However, the announcement of the Polish regulator’s control over crypto asset accounts has faced opposition from local crypto businesses and investors. Experts worry about the lack of clarity in the account blockades, fearing it could lead to uncertainty and potential misuse of power.
“This is another regulation causing controversy, following an attempt a few years ago to push through very unfavorable rules for taxing cryptocurrencies,” said Arkadiusz Jóźwiak, a crypto trader and analyst.
Exploring Poland’s Crypto Landscape
Polish authorities argue that the new regulatory oversight is in line with MiCA’s requirements. However, the MiCA framework doesn’t include provisions for blocking crypto on consumer accounts.
Poland has a significant crypto user base, with 6 million citizens (15% of the population) involved in crypto transactions last year. This number is expected to grow by another million this year, according to Statista.
Additionally, Poland’s revenue in the crypto market is forecasted to reach $456.9 million in 2024, as per Statista’s predictions.
Earlier this year, Poland’s regulator announced plans to begin supervising digital assets by the year’s end. This move aimed to strengthen KNF’s regulatory capabilities and grant the authority to impose financial penalties on non-compliant cryptocurrency companies.
