President Nawrocki of Poland has once again halted the adoption of a contentious law designed to regulate cryptocurrency transactions in the EU nation.
The legislation, drafted by Prime Minister Donald Tusk’s cabinet, has been criticized for imposing much stricter rules on Polish crypto firms than the European standards it’s supposed to introduce.
Polish president vetoes controversial crypto bill for second time
Poland’s head of state, Karol Nawrocki, has imposed another veto on the government-proposed legal framework for the country’s crypto market, arguably the largest in Eastern Europe.
On Thursday, the president returned the document again, which saw little change since the last time it was rejected amid a bitter political clash with the ruling coalition.
The Polish “Crypto-Asset Market Act” should transpose the provisions of the EU’s Markets in Crypto Assets (MiCA) regulation into national law.
However, members of the local crypto community have been complaining its sponsors have gone far beyond the latest European requirements.
One of the points of contention has been the granting of what some see as excessive oversight powers to the Polish Financial Supervision Authority (KNF).
For example, the agency will be able to suspend or prohibit public offerings of cryptocurrencies and their trading, as noted in a report by Telewizja Polska (TVP), Poland’s national broadcaster.
The KNF will be able to impose sanctions on issuers, service providers and trading platforms, including financial penalties for violations by intermediaries engaged in processing crypto transactions.
The authority will also maintain a register of internet domains suspected of fraudulent activities in the crypto space, in order to ensure protection for customers and other market participants.
Criminal liability has been introduced for the issuing of tokens or the provision of services without notifying the KNF as well as fines of up to 10 million złoty ($2.8 million) for the most serious offenses.
Future of Polish crypto law remains uncertain
Poland’s crypto act should now go back to the parliament in Warsaw. The government-sponsored bill was first stopped by President Nawrocki at the end of last November.
The Sejm, the lower house of the legislature, failed to overcome his veto and sent it to the Senate. The upper house introduced its own amendments, most of which were later rejected by the Sejm.
Members of the latter reduced a “supervisory fee” to be charged by the KNF, from 0.4% to 0.1% of the revenue generated by market participants.
This was the only significant revision of the document before it returned to Nawrocki’s desk, amid wide expectations he was going to veto it again.
In an apparent attempt to up the pressure on the president, the KNF warned earlier this week that all domestic crypto platforms will become illegal on July 1, if the law is not passed and signed by then.
In the motives for his veto on the nearly identical first draft, the head of state said it was offering excessive, ambiguous, and disproportionate solutions.
He added that the legal framework put forward by ruling coalition endangered the freedoms of Poles, their property rights, and even the stability of Poland.
The executive power and the parliamentary majority returned fire by launching an investigation into Nawrocki’s connections to the industry, which as its representatives claim, has been infiltrated by players linked to Russia and other nations in the post-Soviet space.
Members of the sector previously warned that the legislation, in its current version, literary threatens the very survival of domestic crypto firms, which are likely to relocate to more favorable jurisdictions in Europe, such as the Baltic states.
The draft will now return to the parliament of Poland, where Tusk doesn’t have the necessary three-fifths majority to overcome Nawrocki’s veto. And if it remains in limbo, Polish companies will be forced to move their offices abroad and apply for MiCA licensed there, the Bitcoin.pl portal noted in a report on the latest development.