Poland’s cryptocurrency community is facing a pivotal moment as lawmakers push forward with sweeping new legislation to regulate the digital asset market. On Friday, September 26, 2025, the Sejm—the lower house of Poland’s parliament—approved the Crypto-Asset Market Act (Bill 1424) with 230 votes in favor and 196 against, sending the controversial bill to the Senate for further consideration. The move has ignited fierce debate among politicians, industry leaders, and crypto enthusiasts, with critics warning the law could spell disaster for Poland’s burgeoning crypto sector.
The new legislation aims to bring Poland’s regulatory framework in line with the European Union’s Markets in Crypto-Assets Regulation (MiCA), which sets out common standards for crypto oversight across the bloc. Yet, as reported by the Polish Press Agency (PAP) and Bitcoin.pl, many argue that Poland’s approach goes far beyond what’s required by Brussels. The bill introduces a licensing regime for all crypto asset service providers (CASPs)—including exchanges, issuers, and custody providers, whether domestic or foreign—requiring them to obtain authorization from the Polish financial supervision authority, the Komisja Nadzoru Finansowego (KNF).
To secure a license, CASPs must submit exhaustive documentation detailing their corporate structure, capital adequacy, internal controls, compliance systems, risk management policies, and anti-money laundering (AML) procedures. The law also mandates that online crypto exchanges maintain individual client accounts to better protect user funds—a measure designed to bolster consumer protection in a market where, according to official data released earlier this year, 18% of Poles have already invested in crypto assets.
Deputy Finance Minister Jurand Drop has been vocal about the need for tighter rules, citing the lack of effective mechanisms to combat fraud. “20% of investors in this market declare they have been victims of some kind of fraud or abuse,” Drop noted, emphasizing the importance of robust oversight to safeguard both customers and market participants from dishonest entities.
But the bill’s sweeping powers and harsh penalties have fueled a wave of backlash. Violations—including providing crypto services or issuing digital tokens without authorization—could result in criminal liability, with fines reaching up to 10 million Polish zlotys (about $2.8 million) and prison sentences of up to two years. Critics say the legislation’s sheer scale and stringency threaten to suffocate innovation and drive Polish crypto firms out of the country.
Janusz Kowalski, an opposition member of the Sejm from the Law and Justice (PiS) party, condemned the bill as the “largest and most restrictive cryptocurrency law in the EU.” He described it as “118 pages of overregulation,” pointing out that similar laws in Germany and the Czech Republic are far shorter and less burdensome. “This law can deal a fatal blow to domestic companies operating in the crypto sector,” warned Kowalski, echoing concerns voiced by many in the industry.
The crypto news outlet Bitcoin.pl did not mince words, calling the act a “real horror” for entrepreneurs and lambasting the KNF’s expanded powers as resembling a “repression apparatus rather than market supervision.” The outlet argued that the new fees and restrictions would “simply finish smaller companies,” while the promised “clear guidelines” amount to little more than costly hurdles.
These fears are not just theoretical. XTB, one of Poland’s largest brokers, has already signaled that it may seek a license in Cyprus to escape the new regime, hinting at a potential exodus of crypto businesses. Jakub Bartoszek, president of the crypto exchange service Cashify, underscored the bill’s high entry costs and multiplied barriers, expressing hope that President Karol Nawrocki “will listen to the voice of the market and veto the law in its current form.”
Polish blockchain advocate and politician Tomasz Mentzen added fuel to the fire by drawing attention to the KNF’s reputation for sluggishness. “The KNF is the slowest-acting regulator in the EU, with an average application processing time of 30 months,” Mentzen wrote on X (formerly Twitter). He warned that the bill could lead to the “destruction of blockchain and stablecoins” in Poland, urging both the Senate and President Nawrocki to intervene and protect the country’s crypto market.
The timing of the legislation is especially notable given Poland’s recent presidential election. Sławomir Mentzen, a prominent Bitcoin advocate and former presidential candidate, finished third in the first round on May 18, 2025, with 14.8% of the vote. He was among those urging President Nawrocki—who won the runoff on June 1 with 50.9%—to block the law. During the final days of the campaign, Nawrocki made a public commitment to support crypto and resist “tyrannical regulations” that would stifle freedom and innovation. “In Poland, innovations must emerge, not regulations. As President of the Republic of Poland, I will be the guarantor that tyrannical regulations restricting your freedom do not come into effect,” Nawrocki declared on X on May 28, just days before his victory.
Despite these promises, the bill’s passage through the Sejm has left the crypto community on edge. As reported by Cryptopolitan, the government insists the law is necessary to impose order on a rapidly growing sector and protect investors from bad actors. Yet, for many in the industry, the threat of criminal liability, high compliance costs, and lengthy regulatory delays could prove too much to bear.
As the Senate prepares to review the bill, the stakes could hardly be higher. If enacted, the law would give CASPs a six-month transitional period to obtain the required KNF license. Failure to comply would mean ceasing operations and facing potential legal consequences. The Polish crypto market—arguably the largest in Central and Eastern Europe—now finds itself at a crossroads, with the future of innovation, investment, and digital finance hanging in the balance.
With President Nawrocki’s veto power looming and industry leaders mobilizing in opposition, the next few weeks will determine whether Poland’s crypto sector faces a regulatory crackdown or a last-minute reprieve. For now, the country’s three million crypto holders and countless entrepreneurs can only wait—and hope their voices are heard in Warsaw’s corridors of power.