In Polish law, the first definition of virtual currency was established in the Act on Combating Money Laundering and Terrorism Financing of 1 March 2018. According to this act, virtual currency is understood as a digital representation of value that is not, among other things, legal tender issued by the National Bank of Poland, foreign central banks, or other public administration bodies, electronic money, a financial instrument, etc., and that is convertible into legal tender in economic transactions and accepted as a means of exchange, and can also be stored or transferred electronically, or be the subject of electronic trade. However, beyond the aforementioned regulation, there are no other provisions of other acts or other implementing acts that regulate, for example, the trading of virtual currencies, let alone regulations regarding enforcement proceedings conducted against them, etc.
Although cryptocurrency is not a tangible asset, according to case law (including the judgment of the Supreme Administrative Court of 6 March 2018, file reference II FSK 488/16), cryptocurrency is considered a property right. It is possible to conduct enforcement proceedings (bailiff enforcement) based on it under Part III of the Code of Civil Procedure. Of course, in the absence of regulations directly regulating such enforcement, in practice this process – although sometimes somewhat more difficult – is not impossible. First and foremost, under Article 8011 of the Code of Civil Procedure, the debtor is obligated to submit a list of their assets along with a declaration – under penalty of criminal liability. According to Article 300 of the Penal Code, preventing the enforcement of a judgment of a court or other state authority is punishable by imprisonment for up to five years. Therefore, if a debtor possesses cryptocurrencies, they should include them in their submitted list of assets. Otherwise, the creditor may instruct the bailiff to search for the debtor's assets. However, the creditor's active participation is essential. If they have such knowledge, they should direct the bailiff to the cryptocurrency exchanges to which the bailiff should send notices of seizure (if the enforcement authority fails to provide explanations or information, the authority may, for example, impose a fine of up to PLN 2,000 under Article 762 of the Code of Civil Procedure). The funds themselves (in the form of cryptocurrencies) may be transferred to an account (address) designated by the creditor if the bailiff does not have such an account. As the above indicates, effective cryptocurrency enforcement is certainly possible in Poland, although it still presents a slightly greater challenge for creditors than traditional enforcement proceedings.
This alert is for informational purposes only and does not constitute legal advice.
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