2024 should be considered a crucial year for the crypto-asset market from a regulatory perspective. The entry into force of Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets (hereinafter "MiCA Regulation"), as well as work on the Polish draft act on the crypto-asset market (hereinafter "Draft Act"), is expected to open a new chapter for this market in Poland and the European Union.
As previously announced, the bill was supposed to be adopted by the end of 2024. However, an analysis of this year's latest Sejm agenda indicates that consideration of the bill was not included in the Parliament's schedule for this year. What does this mean for the Polish crypto-asset market?
Transition period for entities entered into the register of virtual currency activities
Under Article 143(2) of the MiCA Regulation, cryptoasset service providers (hereinafter "CASPs") that provided their services before December 30, 2024, may benefit from an 18-month transitional period to continue providing their services until July 1, 2026. However, the MiCA Regulation provides for an exception under which EU Member States may waive or shorten the transitional period. Poland has exercised this option by introducing a shortened transitional period in the draft legislation, which will end on June 30, 2025.
Failure to adopt the draft law on the crypto-asset market in 2024
The delay in adopting the Polish bill will conflict with the transitional provisions of the MiCA regulation. EU Member States that choose to shorten the transitional period are required to implement appropriate regulations before MiCA becomes applicable, i.e., by 30 December 2024. In Poland's case, this deadline will not be met.
This situation creates a strong argument for applying the 18-month transition period under MiCA for existing virtual currency entities, rather than the shortened period provided for in the draft law. However, it is likely that Polish authorities will question this approach and advocate for the transition period specified in national regulations.
*It should be noted that due to the change in the conceptual framework introduced by the MiCA regulation, current virtual currency service providers (known as VASPs) are referred to as cryptoasset service providers.
This alert is for informational purposes only and does not constitute legal advice.
Legal status as of December 19, 2024
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