Cryptocurrency license and business in Poland

Updated: 11.01.2024

Crypto market in Poland

The crypto-services market in Poland does not have a comprehensive regulation. Generally, cryptocurrency is not a part of the financial market within the meaning of Polish law, so basically it is not a subject to a specific, financial supervision. Although the Polish authorities may exercise supervision over the activities consisting in the provision of payment services, which could concern particularly virtual currency exchange office, there is no direct supervision by Polish financial authorities over activities related to the issuing and trading of cryptocurrencies and, more broadly, crypto assets.

However, it shall be noted that since October 31, 2021 the activity in the field of virtual currency became a regulated activity, which brings additional obligations for entities participating in this market.

What are VASP reporting obligations in Poland?

VASPs – virtual currency operators in Poland are subject to mandatory reporting of quarterly statistic data to GIIF via designated portal. Reports shall be submitted on a quarterly basis within 18 days of the end of the quarter.

Crypto currency business in Poland – is it legal?

Under Polish law the entrepreneur may take any action, except for those expressly prohibited by law. As there is no specific provision of Polish law which clearly prohibits the crypto activity, i.e.  related specifically to virtual currency, we shall assume that such activity is generally legally permissible.

However, since this activity is a regulated activity, it may be performed after the entrepreneur is entered into the register of activities in the field of virtual currencies (kind of crypto license).

In addition, also EU law does not establish any general prohibition in this respect, which was confirmed by the judgment of the Court of Justice of the European Union of October 22, 2015 (C-264/14). CJEU stated that virtual currency performs a function of the means of payment and that the transactions involving units of virtual currency constitute the provision of paid (chargeable) services, exempted from value added tax (VAT).

The scope of crypto-services regulated by Polish law

Polish law establishes specific group of obligations imposed on the entities conducting business activity in the field of virtual currency such us:

  1. exchanges between virtual currencies and means of payment (FIAT currencies),
  2. exchanges between virtual currencies,
  3. intermediation in the exchange referred to in point (1) or (2) above,
  4. keeping accounts, which in the case of virtual currency is the set of identification data in electronic form that provide authorized persons with the possibility of using virtual currency units, including carrying out transactions of their exchange.

 

How to get a crypto license in Poland?

To obtain a crypto license in Poland you must comply with the requirements of clean criminal record and adequate professional qualifications. Afterwards you must submit an electronic application to the Minister of Finance followed by signed compliance statement. The license shall be granted with in 14 days.

 

What is the definition if crypto currency in Poland?

The virtual currency is understood in Polish law as a digital representation of a value that is not:

  1. the legal tender issued by National Bank of Poland, foreign central banks or other public administration bodies,
  2. an international unit of account established by an international organization and accepted by individual countries belonging to this organization or cooperating with it,
  3. electronic money,
  4. a financial instrument,
  5. a bill of exchange or a check
    – and is tradable for legal tender and accepted as a medium, and can be stored or transferred electronically or be traded in e-commerce.

The virtual / crypto currency constitute a property value analogically to the property rights, movable property, real estates, means of payment, financial instruments, securities or foreign exchange values

What are the crypto license requirements in Poland?

The company interested to run business activity in the scope of transactions covering virtual currency is obliged to fulfill the two specific requirements:

  • no criminal record requirement,
  • professional qualifications requirement.
No criminal record requirement for individual, incl. managing persons and beneficial owners an individual person who has not been legally convicted of an intentional crime against the activities of state institutions and local government, against the administration of justice, against the credibility of documents, against property, against economic turnover and property interests in civil law transactions, against money and securities trading, against a crime of terrorist financing and an offense committed for the purpose of material or personal gain or an intentional fiscal offense,
No criminal record requirement for entity the entity, in which the shareholders (partners) entrusted with running the company’s affairs or authorized to represent the company, or members of the management bodies have not been legally convicted of a crime referred to in point 1) above or an intentional fiscal crime,
Professional qualifications requirement persons performing activities in the field of virtual currencies are required to have knowledge or experience related to the activities in the field of virtual currencies,
the above condition is deemed to be met in the case of:

  • completion of a training or a course covering legal or practical issues related to the activity in the field of virtual currencies, or
  • performing, for a period of at least one year, activities related to the activity in the field of virtual currencies

– confirmed by relevant documents.

Only the entities which fulfill both of the above-mentioned requirements will be entered to the register of activities in the field of virtual currencies.

Registration / crypto licensing under Polish law

The company that intends to start operating in the field of virtual currencies in Poland is required to submit an electronic application to the Minister of Finance for entry in the register, containing:

  • name and surname or company’s name,
  • the number in the register of entrepreneurs in the National Court Register, if such a number has been assigned, and the Tax Identification Number (NIP),
  • an indication of the services provided in the field of virtual currencies,
  • qualified electronic signature, trusted signature or personal signature of the person submitting the application.

The above application shall be accompanied by a declaration that:

  • the data contained in the application is complete and true,
  • the applicant knows the conditions for conducting activities in the field of virtual currencies and that the conditions for carrying out this activity are met (the condition of no criminal record and the condition of professional qualifications),

Under the above statement there shall be included the following clause: “I am aware of the criminal liability for making a false statement”, which replaces the instruction of the body authorized to collect the declaration of criminal liability for submitting a false declaration.

The Director of the Tax Administration Chamber in Katowice, under the authorization given by Minister of Finance, makes an entry of the applicant to the register of activities in the field of virtual currencies within 14 days from the date of receipt of the application for entry along with the above-mentioned declaration.

The fulfillment by the entity of the conditions required by Polish law to perform activities in the field of virtual currencies is subject to control, which can be conducted by the Director of the Tax Administration Chamber in Katowice.

An entity operating in the field of virtual currencies, which performs this activity without being entered in the register is subject to a penalty of up to PLN 100,000.

Can Polish authorities reject the motion to enter in cryptocurrency / virtual currency register?

There are several situations when the Polish authorities are competent to issue an administrative decision on refusal to make an entry of the entrepreneur into the register of activities in the field of virtual currencies.

In particular it may happen if:

  1. the application is incomplete and has not been completed within the prescribed period,
  2. the data contained in the application are inconsistent with the facts,
  3. if a legally binding decision prohibiting the entrepreneur from carrying out the business activity covered by the entry has been issued.

If such a negative decision is issued, the entrepreneur is entitled request for reconsideration of the case by the Minister of Finance or to file an appeal directly to the competent Regional Administrative Court.

Post-crypto-registration obligations under Polish law

If the company conducts a business activity in the field of virtual currency it shall perform a several specific post-registration obligations established in Polish law, in particular it shall:

  • identify and assess the money laundering and terrorist financing risks relating to its activities,
  • perform the financial security measures especially:
    • customer identification and verification of identity,
    • identification of the real beneficiary and taking reasonable steps to:
    • assessment of business relations and, as appropriate, obtaining information on their purpose and intended nature,
    • ongoing monitoring of the customer’s business relations,
  • introduce an internal procedure for counteracting money laundering and terrorist financing,
  • notify Polish authorities about the particular transactions,
  • cooperate with Polish authorities in a case of crime suspicion.

The outsourcing of the services related to the financial security measures is acceptable, however, it should be remembered that entrusting these services to the third parties does not absolve the company from its liability.

Sanctions for violation of the crypto-business obligations under Polish law

In the case of improper performance or non-performance of the post-registration crypto-business obligations, there might by imposed administrative penalties by Polish authorities, covering in particular:

  • publication of information about the entity and it’s illegal activity in the Public Information Bulletin on the website of the office servicing the Minister of Finance,
  • an order to cease specific actions by the entity,
  • deletion from the register of activities in the field of virtual currency,
  • prohibition of performing duties in a managerial position by a person responsible for a, for a period not longer than one year,
  • financial penalty, which shall be imposed up to the amount of twice the amount of the benefit gained or the loss avoided by the entity as a result of the infringement or – if the amount of this benefit or loss cannot be determined – up to the equivalent of EUR 1,000,000.

In addition, a person acting for or on behalf of the entity, which fails to notify Polish authorities about crime suspicion or provides with false or conceals true data concerning transactions, accounts or persons, shall be punished by imprisonment from 3 months to 5 years.

Cryptocurrency in Poland – Q&A

Is the activity in the field of virtual currencies (cryptocurrencies) legal in Poland?

Yes, as long as there is no explicit prohibition, the activity in the field of virtual currencies (cryptocurrencies) is basically legal in Poland.

Is the activity in the field of virtual currencies (cryptocurrencies) legal in European Union?

Yes, the activity in the field of virtual currencies (cryptocurrencies) is generally legal in European Union, which was confirmed by the Court of Justice of the European Union in the judgment of October 22, 2015 (C-264/14).

Is the cryptocurrency business supervised by Polish financial authorities?

Generally, cryptocurrency business is currently not a part of the financial market within the meaning of Polish law, so basically it is not a subject to a specific, financial supervision.

Although the Polish authorities may exercise supervision over the activities consisting in the provision of payment services, which could concern particularly virtual currency exchange office, there is no direct supervision of financial authorities over activities related to the issue and trading of cryptocurrencies and, more broadly, crypto assets.

However, it shall be noted that since October 31, 2021 the activity in the field of virtual currency became the regulated activity, which brings additional obligations for entities participating in this market.

Who can run business activity in Poland in the field of virtual currencies?

The activity in the field of virtual currencies may be conducted by the entrepreneur, i.e. individual entrepreneurs, partnerships and companies, who is registered in the register of such activities maintained by the Director of the Tax Administration Chamber in Katowice.

Is there a crypto license in Poland?

No, there is mere a registration process to run crypto business in Poland.

What are the cryptocurrency business registration requirements under Polish law?

There are two specific, main requirements, which shall be fulfilled to be successfully registered as the company running business activity in the field of virtual currencies in Poland:
no criminal record requirement, professional qualifications requirement. Only the entities which fulfilL both of the above-mentioned requirements will be entered to the register of activities in the field of virtual currencies.

How long does the crypto registration process in Poland take?

The Director of the Tax Administration Chamber in Katowice, under the authorization given by Minister of Finance, makes an entry of the applicant to the register of activities in the field of virtual currencies within 14 days from the date of receipt of the properly fulfilled and filed application with required documents enclosed to it.

When my crypto license application may be refused?

There are several situation when the Polish authorities are competent to issue an administrative decision on refusal to make an entry of the entrepreneur into the register of activities in the field of virtual currencies.

In particular it may happen if: the application is incomplete and has not been completed within the prescribed period, the data contained in the application are inconsistent with the facts, or if a legally binding decision prohibiting the entrepreneur from carrying out the business activity covered by the entry has been issued.

How can I defend against the refusal of my crypto license application?

If the Polish authorities issue an administrative decision on refusal to make an entry into the register of activities in the field of virtual currencies, the applicant is entitled to request for reconsideration of the case by the Minister of Finance or to file an appeal directly to the competent Regional Administrative Court.

Are there any specific post-registration obligations related to virtual currency business in Poland?

Yes, if the entrepreneur conducts a business activity in the field of virtual currency he shall perform a several specific post-registration obligations established in Polish law, in particular it shall:
identify and assess the money laundering and terrorist financing risks relating to its activities and perform the financial security measures especially.

Can I entrust the performance of post-registration obligations to a third party?

Yes, the outsourcing is acceptable, however, it can concern only the services related to the financial security measures. It should be also remembered that entrusting these services to the third parties does not absolve the entrepreneur from his liability.

Are there any sanctions for violation of the post-registration obligations under Polish law?

Yes, in the case of improper performance or non-performance of the post-registration obligations, there might by imposed administrative penalties by Polish authorities. In addition, a person acting for or on behalf of the entity, which violate some of provisions might be criminally liable.

How long does it take to obtain crypto currency license?

The crypto currency license shall be granted within 14 days from the date of submitting the complete application together with all required attachments.

Is ICO allowed in Poland?

The cryptocurrency market is largely unregulated under Polish law – currently initial coin offerings are not prohibited, which means they are allowed under the Polish law. However, the Polish Financial Supervision Authority (KNF) warns that investing in an ICO carries a high risk.

What the crypto currency license entitles to?

Licensed entities may:

  • make exchanges between virtual currencies and means of payment,
  • make exchanges between virtual currencies,
  • mediate in the exchange of virtual currencies and between virtual currencies and means of payment,
  • maintain accounts entitling clients to use virtual currency units, including carrying out their exchange transactions.

Is PSD2 license required for crypto currency activity?

Generally, PSD2 license is not required for crypto currency activity. However, if the crypto currency activity covers the provision of payment services, PSD2 license might be needed. Specifically, in some cases it may be necessary to obtain domestic payment institution license (KIP) or small payment institution license (MIP).

How Polish regulator (KNF) perceives crypto currency activity?

The Polish regulator (KNF) finds the crypto currency activity generally legal and permissible, but at the same time points out that the crypto asset market is unregulated, there is a large amount of irregularities on it, there are no mechanisms to protect market participants, which makes investing in cryptocurrencies risky and is not officially recommended.

Expert team leader DKP Legal Piotr Putyra
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