As Poland prepares to implement the European Union's comprehensive crypto regulation, the Markets in Crypto Assets (MiCA), the country's financial regulator has been granted new powers to tighten oversight of the crypto market. The Polish Financial Supervision Authority (KNF) can now independently block access to crypto accounts for up to 96 hours if any suspicious activity arises.

However, in cases where criminal activity involving funds in the account is suspected, the blocking period can be extended up to 6 months with the consent of the prosecutor's office. This increased regulatory oversight comes as Poland gears up to offer clear crypto guidelines in line with the forthcoming MiCA legislation, which aims to regulate the issuance and trading of digital assets while providing legal certainty for businesses.

The announcement of the KNF's new authority to block crypto accounts has drawn opposition from local crypto businesses and investors. Crypto experts have raised concerns about the lack of clarity surrounding the account blockades, expressing fears that it could lead to uncertainty and potential misuse of power.

Arkadiusz Jóźwiak, a crypto trader and analyst, stated, "Given the aversion that the KNF has shown towards cryptocurrencies so far, the ability to preemptively block accounts based on mere suspicions may, unfortunately, be excessively used and abused."

Poland's Thriving Crypto Market

The new regulatory oversight is claimed by Polish authorities to fall under the requirements of MiCA. However, the MiCA framework itself does not include provisions for 'blocking' crypto on consumer accounts.

Poland boasts a significant crypto presence, with 15% of the country's population (approximately 6 million citizens) involved in crypto transactions last year. This number is forecasted to increase by another million this year, according to Statista data. Additionally, Poland's crypto market revenue is projected to reach $456.9 million in 2024.

Earlier this year, Poland's regulator announced plans to start supervising digital assets by the end of 2023. This development aimed to bolster the KNF's regulatory capabilities and grant the authority to impose financial penalties on non-compliant cryptocurrency companies.