The Polish Financial Supervision Authority (KNF) has been granted expanded powers to regulate the crypto market, ahead of the implementation of the EU’s Markets in Crypto Assets Regulation (MiCA) legislation. MiCA, designed as a comprehensive crypto law, is scheduled to come into effect this year.
Under the new authority, KNF can autonomously suspend crypto accounts for up to 96 hours in case of any suspicion. If there are suspicions of criminal activity related to the funds in the account, this blocking period can be extended for up to 6 months with approval from the prosecutor’s office.
The heightened oversight aligns with Poland’s efforts to establish clear guidelines for the crypto industry in accordance with MiCA. The legislation aims to regulate the issuance and trading of digital assets while providing legal certainty for businesses.
However, the announcement of KNF’s control over crypto asset accounts has faced opposition from local crypto businesses and investors. Concerns have been raised regarding the lack of clarity surrounding the account blockades, which could potentially lead to uncertainty and misuse of power, as reported by Finance Magnates.
Arkadiusz Jóźwiak, a crypto trader and analyst, expressed skepticism about the regulation, citing previous attempts to enforce unfavorable rules for taxing cryptocurrencies. He cautioned that KNF’s ability to preemptively block accounts based on mere suspicions might be excessively utilized and abused.
While Polish authorities argue that the new regulatory oversight is in line with MiCA’s requirements, it’s worth noting that the MiCA framework does not explicitly include provisions for ‘blocking’ consumer crypto accounts.
Despite regulatory challenges, Poland has seen significant participation in the crypto market, with approximately 6 million citizens (15% of the population) engaging in crypto transactions last year. Statista predicts this number will increase by another million this year. Additionally, Poland’s crypto market revenue is forecasted to reach $456.9 million in 2024, according to Statista.
Earlier this year, Poland’s regulator announced plans to commence supervision of digital assets by the year’s end. This initiative aims to enhance KNF’s regulatory capabilities and empower the authority to impose financial penalties on cryptocurrency companies that fail to comply with regulations.
