Crowdfunding through the eyes of the Inspector General for Financial Information

In July 2024, the General Inspector of Financial Information (GIIF) published another issue of its typological newsletter dedicated to crowdfunding. 

The publication covers:

• the history of crowdfunding,
• the current position and structure of the phenomenon,
• the definition,
• the risks associated with crowdfunding,
• a brief summary.

Particularly important seems to be the presentation of the legal framework outlined by EU and Polish law, as well as forecasts for the future of crowdfunding. 

What is Crowdfunding?

Crowdfunding, according to the GIIF, consists of the collection and allocation of capital donated for the development of a specific venture in exchange for a specific return benefit, which involves a wide range of capital donors, is characterized by the use of ICT, and is characterized by a lower barrier to entry and better transaction terms than those generally available in the market.

The most popular forms of crowdfunding are donation, remuneration, and investment.

Legal Framework for Crowdfunding

Despite the prevalence of crowdfunding, there were no laws regulating fundraising in Poland until 2022. On July 7, 2022, the Law on Crowdfunding for Economic Ventures and Borrower Assistance was enacted.

This act implements Regulation (EU) 2020/1503 of the European Parliament and of the Council of October 7, 2020, on European crowdfunding service providers. It is important to clarify that this regulation applies to crowdfunding platforms operating in the so-called equity model.

The EU regulations establish a uniform European crowdfunding license for all EU countries, requiring, among other things, a minimum of €25,000 in capital.

An important consequence of the aforementioned legal acts is the requirement to register crowdfunding sites with national supervisory authorities. In Poland, the competent supervisory authority (issuing permits) for platforms specializing in loan or investment crowdfunding is the Financial Supervision Commission.

Crowdfunding – New Changes on the Horizon

In November 2023, the transitional period ended, after which only entities with a permit can conduct equity and loan model crowdfunding activities in Poland.

The GIIF has presented the most important issues concerning the functioning of crowdfunding based on the current legal state in an accessible manner. The publication provides a practical approach to crowdfunding, also pointing out the risks in the field of AML (Anti-Money Laundering) and CFT (Counter Financing of Terrorism).

For detailed information and professional advice on the new regulations concerning crowdfunding, please contact our law firm. Our team of experts is ready to help you adapt smoothly to the changes and provide comprehensive legal support.