Polish parliament backs the government’s Crypto-Asset Market Act

Lawmakers in Poland approved a government-proposed law to regulate cryptocurrency transactions in line with current European rules.

The latest attempt to put the country’s digital-asset market in order comes in the aftermath of the collapse of a major coin trading platform.

The failed exchange, Zondacrypto, is in the eye of a political storm, which produced proposals for a total crypto ban amid concerns over customer protection and Russian meddling.

Polish parliament backs delayed draft law to implement MiCA

Members of the Sejm, the lower house of parliament in Poland, backed a bill designed to transpose the EU’s Markets in Crypto Assets (MiCA) provisions into national law.

On Friday, 241 Polish deputies voted in favor of the bill drafted by the liberal coalition government of Prime Minister Donald Tusk, 200 were against, the PAP news agency reported.

This was the third try to pass it, after President Karol Nawrocki returned it twice. The ruling majority’s attempts to defeat the veto were foiled by its conservative allies in the chamber.

Against the backdrop of this stalemate, three alternative pieces of legislation were filed, including one put forward by the office of the head of state.

On Wednesday, the parliamentary Public Finance Committee designated Tusk’s Crypto-Asset Market Act as the lead bill, effectively ending the review of the other.

The only amendment taken from the president’s proposal is to oblige relevant financial authorities to report annually on the state of the nation’s crypto market.

The upcoming law tasks Poland’s Financial Supervision Authority (KNF) with oversight. The regulator will be responsible for issuing early warnings about suspicious projects.

It will also be enabled to block fiat or crypto accounts and suspend certain transactions for 96 hours, although it will also be able to extend the asset freeze for up to six months.

Such excessive powers were cited among Nawrocki’s motives for the veto. Critics have accused the authors of the bill of going far beyond what’s required by Brussels.

One of the other proposals, that of crypto proponent Sławomir Mentzen’s nationalist Konfederacja faction, suggested a minimalistic approach to implementing MiCA.

Zonda case casts shadow over Poland’s push to regulate crypto

Poland has until July 1 this year to introduce the common European rules and license its crypto firms. It’s still unclear if the slightly amended act will be stopped again by the president.

Efforts to properly regulate the sector have been overshadowed by the recent crash of a leading cryptocurrency exchange in the country’s market for digital assets.

The Polish-rooted Zondacrypto, which operated under an Estonian license, collapsed in April, leaving traders without access to their assets after it halted withdrawals amid liquidity issues.

The exchange has been at the heart of the political clash in Warsaw amid allegations it funded political events, organizations, and figures from the opposition to lobby against the government’s draft law.

Tusk and representatives of his governing coalition have claimed there’s a Russian connection in the case and accused opponents of serving Moscow’s interests.

A press report quoting Poland’s counterintelligence service revealed that a notorious mafia gang from St. Petersburg established control over the trading platform a few years ago.

At least 30,000 Poles are believed to have suffered financial losses amounting to at least 350 million Polish zloty (over $95 million), according to preliminary estimates.

The massive damage, which led to probes for fraud and money laundering not just in Poland, changed the political stance of one of President Nawrocki’s allies in parliament regarding cryptocurrency regulation.

At the start of the week, the Law and Justice (PiS) party, which helped him get elected last year, proposed to completely ban all crypto-related activities in the country, despite previously opposing the Tusk cabinet’s restrictive bill.

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