The Polish Financial Supervision Authority (KNF) received authoritative powers to tighten the crypto market, ahead of the EU’s MiCA rules. The Markets in Crypto Assets Regulation (MiCA) legislation, EU’s comprehensive crypto law, is set to take effect this year.
The new powers will enable KNF to independently block crypto accounts for 96 hours if any suspension arises. However, in case of suspected criminal activity linked to funds in the account, the blocking period can be extended up to 6 months, with the consent of the prosecutor’s office.
The increased oversight comes at a time when Poland is preparing to offer clear crypto guidelines in line with MiCA. The MiCA legislation aims to regulate issuance and trading of digital assets and facilitate legal certainty for businesses.
The announcement of Polish regulator’s control over crypto asset accounts received opposition from local crypto businesses and investors.
Crypto experts are concerned about the lack of clarity in the account blockades and believe this could lead to uncertainty and misuse of power, Finance Magnates reported.
“This is another regulation that is causing considerable controversy, following an attempt a few years ago to push through very unfavorable rules for taxing cryptocurrencies,” said crypto trader and analyst, Arkadiusz Jóźwiak.
“Given the aversion that the KNF has shown towards cryptocurrencies so far, the ability to preemptively block accounts based on mere suspicions may, unfortunately, be excessively used and abused.”
Poland’s Crypto Scope
Polish authorities claim that the new regulatory oversight falls under MiCA’s requirements. However, the MiCA framework does not include ‘blocking’ of crypto on consumer accounts.
Besides, Poland boasts 6 million citizens (15% of the country’s population) involved in crypto transactions last year. According to Statista data, the number is forecasted to increase by another million this year.
Additionally, Poland’s Revenue in the crypto market is projected to reach $456.9 million in 2024, Statista predicted.
Early this year, Poland’s regulator announced plans to start supervising digital assets by the end of this year. The development aimed to bolster KNF’s regulatory capabilities and grant the authority to impose financial penalties on non-compliant cryptocurrency companies.