Poland’s Sweeping Crypto Law Sparks Fears of Business Exodus

Poland has become the latest European nation to adopt sweeping cryptocurrency legislation, but the move has ignited fierce criticism from industry players who warn that the law risks suffocating innovation and driving domestic firms abroad.

The Sejm, Poland’s lower house of parliament, approved the so-calledCrypto Assets Act on Friday with 230 votes in favor and 196 against. The legislation transposes the European Union’s Markets in Crypto Assets (MiCA) framework into national law but goes further than required under EU rules, giving Poland’s Financial Supervision Authority (KNF) far-reaching oversight powers.

Supporters argue the measure is necessary to protect investors in a market that has grown rapidly. An estimated 18% of Poles already own digital assets, and Deputy Finance Minister Jurand Drop has emphasized that one in five investors report having fallen victim to fraud or abuse. “The regulations are crucial for strengthening investor protection,” he said earlier this year.

The act imposes criminal liability for unauthorized issuance of tokens or provision of crypto services, with penalties including fines of up to 10 million złoty (around $120,000) and prison terms of up to two years. Licensed exchanges will be required to maintain individual client accounts, and the KNF will be responsible for monitoring violations and fraudulent activity.

Yet for critics, the bill’s provisions resemble repression rather than regulation. The crypto news outletBitcoin.pldescribed the legislation as “a real horror” for entrepreneurs, claiming that it burdens firms with costly requirements that smaller players cannot meet. “The crypto assets law gives the KNF permissions that resemble a repression apparatus rather than market supervision,” the outlet wrote.

Industry leaders share that concern. Jakub Bartoszek, president of the exchange service Cashify, argued that Poland’s version of MiCA is among the most restrictive in Europe, warning that “high entry costs and multiplied barriers” could eliminate competition. XTB, one of Poland’s largest brokers, has already signaled it may pursue a license in Cyprus instead, raising fears of a broader exodus of Polish crypto businesses.

Political opposition has also been vocal. During debates in the Sejm, former presidential candidate and Bitcoin supporter Sławomir Mentzen urged President Karol Nawrocki to veto the bill. Nawrocki, who assumed office in August, has hinted he may consider doing so.

The clash reflects a broader tension within Europe: how to balance investor protection with maintaining a competitive environment for digital innovation. While MiCA was intended to harmonize rules across the bloc, Poland’s expansive interpretation could make it an outlier, potentially pushing entrepreneurs to relocate to more crypto-friendly jurisdictions such as Estonia or Cyprus.

For now, the Crypto Assets Act moves to the Senate, where it will undergo further scrutiny. But unless the president intervenes, Poland’s attempt to lead in regulatory rigor may come at the cost of losing its position as a Central European hub for cryptocurrency innovation.