Interpretation of the Proposed Supervisory Fees for the Crypto-Asset Market- Position of the Polish Financial Supervision Authority

The Polish Financial Supervision Authority (KNF), in its published communication, presented a simulation illustrating how supervisory fees over the crypto-asset market may be calculated. These fees are to apply to Crypto-Asset Service Providers (CASPs) as well as to issuers of Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs), within the meaning of Regulation (EU) 2023/1114 of the European Parliament and of the Council (MiCA).

How does the regulator interpret the supervisory provisions?

Supervisory fees applicable to CASPs

Pursuant to Article 81 of the Draft Act on the Crypto-Asset Market (DACM), the calculation basis for the supervisory fee imposed on CASPs is the average value of the so-called “total revenues” achieved in the last three financial years.

These revenues comprise:

• income from the core business of providing crypto-asset services.
• profit from operations on crypto-assets held for trading purposes.

The supervisory fee may not exceed 0.4% of the said average and may not be lower than the equivalent of EUR 500. According to KNF, this model is inspired by the methodology applied to investment firms, given the similarity in the scope of regulated activities.

What supervisory fees applicable to ART and EMT issuers?

For issuers of ARTs and EMTs, pursuant to Article 82(1) DACM, the calculation basis for the supervisory fee is the average value of financial liabilities arising from the issued tokens.

This average is calculated as the arithmetic mean of the daily sums of liabilities during the previous twelve calendar months, determined as at 1 January of the relevant year. The fee may not exceed 0.5% of this value and may not be lower than EUR 500.

Other factors affecting the supervisory fee

KNF has emphasised that the provisions concerning the calculation of supervisory fees for CASPs and issuers of ARTs and EMTs do not stipulate the exact amount payable by each entity but merely determine the upper threshold. The actual amount of the fee will primarily depend on the overall supervisory costs incurred by KNF in exercising oversight over the crypto-asset market. Furthermore, the specific rates, payment deadlines and calculation algorithms will be laid down in a regulation of the Prime Minister.

In its simulation, KNF assumed that the Polish market structure would be dominated by CASPs (approx. 70% of the market share), while the remaining 30% would consist of ART and EMT issuers.

What does the KNF’s position mean for the crypto-asset market? Conclusions from the interpretation of regulations

The interpretation presented by the Polish Financial Supervision Authority (KNF) is significant for several reasons.

First, the Polish regulator has provided market participants with an authoritative construction of the relevant provisions together with the methodology for calculating the supervisory fee.

Second, a sample calculation model was attached, which renders otherwise complex formulas and algorithms considerably more comprehensible.

Third, the issue of supervisory fees appears to be one of the most relevant and closely followed matters for entities operating in the crypto-asset sector, which should be regarded as an appropriate and constructive direction of communication with the market.

Moreover, the interpretation issued by KNF appears proportionate and more favourable than had previously been feared: the annual contribution is intended to reflect the actual scale of activity in the crypto-asset domain, rather than the entity’s overall revenues.

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