New regulations for the cryptocurrency market! See what’s about to change
The cryptocurrency market is entering a new era of changes that are crucial for Poland, the European Union and globally, including countries such as the United States and India.
The first provisions of Regulation (EU) 2023/1114 on the cryptoassets market (Market in Crypto-Assets Regulation) will come into force as early as June 30 this year.
Revolution in European Regulation
The European Union is making significant regulatory changes regarding cryptocurrencies. The new MiCA (Market in Crypto-Assets Regulation) is expected to give customers the right to hold cryptocurrency assets and increase confidence in the industry.
Companies offering investments in cryptocurrencies will have to meet strict formal requirements, increasing market transparency and eliminating companies with questionable reputations.
Strengthening control
The new regulations aim to strengthen control over cryptocurrencies and combat money laundering. The European Parliament has introduced regulations that increase due diligence and identification measures in the cryptocurrency sector.
Providers of services related to crypto assets, such as exchanges and gambling services, will have to conduct detailed background checks on customers and report suspicious transactions to law enforcement authorities.
New Authority – AMLA
These changes are part of the broader context of the European Cryptocurrency Markets Regulation (MiCA), which aims to regulate cryptocurrency asset operations in the EU, protect investors and ensure financial stability.
The new legislation also plans to establish an Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA) to oversee and enforce strict due diligence and reporting requirements for cryptocurrency-related entities across the European Union.
Draft law on cryptoassets in Poland
New legislation regulating the cryptocurrency sector is also expected in Poland. Among other things, as part of the cryptocurrency law. The Financial Supervision Commission is understandably concerned about the development of the industry, with a focus on identifying risks. However, through dialog and using the experience of transparent market participants, solutions can be pursued that will benefit the entire cryptocurrency sector.
New regulations should create a stable investment environment, reflecting the progressive approach of Polish financial regulators. However, there is no shortage of solutions that seem quite controversial for cryptocurrency market participants.
New powers for the Financial Supervision Commission
As announced, the Financial Supervision Commission (“FSC”) has been granted supervisory powers over cryptocurrency market participants. The draft law gives the FSC the right to conduct inspections, to which the provisions of the Law on Capital Market Supervision of July 29, 2005 will apply.
Pursuant to Article 26 of the Draft Law, the inspected entity will be subject to an administrative fine of PLN 20,000,000 if it obstructs or impedes the commencement or conduct of the inspection by the FSC.
In addition, the FSC will be able to cooperate and exchange information with the authorities of other EU member states in order to perform its supervisory duties.
Controversial provisions in the draft
Blocking of crypto addresses and accounts
The draft law clarifies the rules for blocking addresses in the distributed registry and crypto asset accounts, which can be applied in case of suspicion of committing one of the crimes listed in Chapter 6 of the draft law.
The block may be imposed for up to 96 hours from the time specified in the request (in case of a decision by the Chairman of the FSC) or for 6 months from the date of receipt of the notification (in case of a decision by the prosecutor).
Suspension of transactions
In addition to the possibility of total or partial blocking of an address or an account, the prosecutor will also have the power to stop a specific transaction related to cryptoassets.
It should be noted, however that the explanatory memorandum to the draft law does not explain how the new provisions will affect the provisions on safeguards for the execution of criminal judgments on property contained in the Code of Criminal Procedure.
New Registry of Internet Domains and IP Addresses
The proposed law provides for a new solution that is not directly mentioned in MiCAR – the creation of a registry of Internet domains and IP addresses.
This registry will include entities engaged in crypto activities without proper authorization, as well as entities that violate MiCAR regulations, if other effective measures fail to stop such violations within a reasonable period of time.
Inclusion in this registry will require ISPs to allow or restrict access to Internet interfaces using a domain name or IP address included in the registry, free of charge. ISPs will also be required to redirect calls related to such domains or IP addresses to the appropriate FSC website. The registry will be publicly accessible, and it will be possible to challenge the registry entry itself.
What do these changes mean for business owners?
The cryptocurrency market is facing significant regulatory changes aimed at increasing transparency and trust in the sector.
New MiCA regulations and the Polish Cryptoactives Act will introduce strict requirements for oversight, customer identification and suspicious transaction reporting. A registry of domains and IP addresses is also planned, which will help combat the activities of illegal entities in the cryptocurrency industry.
As a business owner, how do you see the changes coming? Don’t be left behind and prepare your business for the new regulations. Contact us now to learn more at [email protected].