Given the confusion that has gripped the market following the collapse of the FTX cryptocurrency (virtual currency) exchange, it is worth considering how the law protects people using the services of such entities.
Recently, conducting virtual currency exchange business in Poland has been subject to the requirement of entry in the register of virtual currency businesses. Such entry does not require meeting particularly stringent requirements. It's certainly worth noting the requirement of a clean criminal record and the requirement to complete a course covering legal or practical issues related to virtual currency business. The latter requirement will not be required if the person intending to engage in the activity presents documents confirming that they have been conducting such business for at least a year.
Meeting these requirements guarantees proper performance of the business. Anyone interested in using a crypto-to-fiat or crypto-to-crypto exchange service should verify whether the entity they wish to use has been entered into the register indicated above.
If we intend to use the services of foreign entities, it's also worth verifying whether the entity has obtained the appropriate registration or licenses in the country where it is headquartered or operates. Cryptocurrency exchange clients should feel safer in countries where regulatory requirements for such entities are more stringent. Estonia is a prime example, where operating a virtual currency exchange requires, among other things, submitting a business plan to supervisory authorities, preparing reports on the activities conducted, and employing individuals with specialized AML competencies.
On the other hand, it's important to remember the rights of an exchange client if they meet the definition of a consumer. European Union countries, including Poland, certainly provide the highest level of protection for this type of individual. A cryptocurrency exchange service provider, like any other business entity, cannot include abusive clauses in its contract with a client. Such provisions are invalid from the moment the contract is concluded and do not bind the client. Examples include the impossibility for the entrepreneur to unilaterally amend the contract without a material reason specified in the contract, the exclusion of the consumer's right to withdraw from, terminate, or terminate the contract, and making the conclusion of a contract contingent on obtaining a promise from the consumer to enter into further similar contracts in the future.
Therefore, when using cryptocurrency exchanges, you should carefully choose the entity you intend to use, taking into account its legal status, location, and applicable laws in a given country. It's also important to read the exchange's regulations to understand the rights and obligations of both parties.
This alert is for informational purposes only and does not constitute legal advice.
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