MiCA Transition Period for VASPs in Poland
The Markets in Crypto-Assets Regulation – MiCA regulation introduces a new framework to govern crypto-asset activities, however it also establishes a transition period for existing VASPs in Poland to adapt to the new standards and apply for the necessary Crypto-Asset Service Provider (CASP) license.
Polish VASPs already operating under national regulations (entry into Polish VASP Register), may make use of transition period to avoid disruption in conducting business activity in the field of cryptocurrencies and ensure compliance under MiCA in Poland.
What Is MiCA Transition Period for Polish VASPs?
First of all, it should be noted that all assumptions described in this article are based on the draft of the new Polish Act on the Crypto Assets Market. This act includes provisions introducing MiCA into the Polish legal framework. However, this act is still in the consultation phase. Therefore, we rely solely on the draft assumptions, which may be subject to change. The progress of the legislative work on the Polish Act on the Crypto-assets Market can be tracked here: https://legislacja.rcl.gov.pl/projekt/12382311/katalog/13040399#13040399
According to article 152m point 1 of new Polish Act on Crypto Assets Market:
From the date of entry into force of this Act until the issuance of the authorization referred to in Article 59(1)(a) of Regulation 2023/1114, or the refusal to grant such authorization, but no later than June 30, 2025, an entity registered in the virtual currencies activity register as of the effective date of this Act shall conduct its virtual currency activities in accordance with the existing provisions on anti-money laundering and counter-terrorist financing.
According to above-mentioned provision, Polish company which is entered into VASP Register as of 30/12/2024, will be entitled to continue its business operations in the field of virtual currencies until 30/06/2025. After that date, a VASP in Poland may continue its business operations only if it obtains CASP license.
In this context, there are some rather significant uncertainties to consider. Firstly, the draft of the Polish law on the crypto-asset market is still in the public consultation phase. Therefore, we are relying only on assumptions that are expected to come into effect in less than two months.
Secondly, only after the current public consultations are concluded will we learn the final solutions regarding the transition period. In my opinion , this period will be extended until the end of 2025. Such an approach, for example, has been proposed in Germany. Moreover, the first draft of the law (then called the Crypto-Asset Act) initially proposed such a transition period lasting until 30/12/2025.
Furthermore, the draft still does not answer the question of what will happen with Polish VASPs that submit an application for a CASP license after 30/12/2024, and have not yet received a decision. Even assuming the application is submitted at the earliest possible date, i.e., 30/12/2024, it is highly doubtful that the new regulator (the Polish Financial Supervision Authority, pl: “Komisja Nadzoru Finansowego”, “KNF”) would be able to process it within six months.
Some Internet publications suggest that if a Polish VASP submits an application for a CASP license before 1/05/2025, it will be entitled to continue operations until a decision is made. However, these publications are incorrect. This assumption applies only to entities conducting virtual currency activities other than those currently regulated under Polish law, such as virtual currency consulting (“providing advice on crypto-assets”).
Consequently, it is recommended to approach the currently proposed timeline for the MiCA transition period in Poland with some caution. It is likely to change, and I will, of course, keep you updated on this through my blog.
Update 2/12/2024 – new draft of Polish Act on Crypto-Assets market has changed transition period – click here for updated information.
What Does MiCA’s Transition Period Mean for VASPs in Poland?
In addition to what I have already written regarding the right to continue business operations in the field of crypto-assets, the MiCA transition period in Poland will have the following consequences:
- During the transition period, VASPs in Poland will be subject to unchanged obligations based on the current provisions of the Polish AML Act. This means that the additional requirements imposed by MiCA on Crypto Asset Service Providers will not apply during this time.
- The General Inspector of Financial Information (GIIF) will remain the competent authority overseeing Polish VASPs.
- In case of changes regarding:
- the list of shareholders,
- the beneficial owner,
- the method of representation,
- the persons authorized to represent the entity,
Polish VASPs must inform the Director of the Tax Administration Chamber in Katowice (current VASP Register holder) about these changes within 14 days from the date of their occurrence, providing details on the nature of the changes.
It is also important to note the regulatory measures concerning VASPs in Poland under the new law, which indicate that VASPs in Poland may be removed from the VASP register during transition period in the following cases:
- Lack of entry in the Commercial Register of the National Court Register for legal entities or organizational units without legal personality;
- Establishing that during this period:
- the entity has twice failed to respond to requests sent to it at the registered office and address listed in the Commercial Register of National Court Register in connection with the audit;
- the entity refused to accept a notification of the intention to initiate an audit, sent to it at the registered office and address listed in the Commercial Register of National Court Register
- the entity did not collect from the postal facility a delivery sent to it at the registered office and address listed in the Commercial Register of the National Court Register, containing a notification of the intention to initiate an audit;
- the authorized representative of the entity or members of that body have been removed from the Commercial Register of the National Court Register;
- the address of the entity has been removed from the Commercial Register of the National Court Register and a new address has not been entered into that register;
- Receipt of information from the GIIF about the entity’s failure to comply with the obligation of providing information (including submitting quarterly reports).
Recommendations for VASPs in Poland during MiCA transition period
The MiCA transition period in Poland should serve as a critical timeframe for Polish VASPs to ramp up their preparatory efforts for obtaining a CASP license. By January 2025, VASPs should have already initiated the first steps toward securing new license. At the beginning of the year, it will be vital for VASPs in Poland to create a comprehensive roadmap outlining their strategy and milestones.
In the subsequent months, VASPs should actively work towards fulfilling the requirements outlined in MiCA. It’s important to note that obtaining a CASP license in Poland demands a customized approach for each organization, along with the preparation of the requisite documentation. There can be no expectation of a one-size-fits-all solution in this process.
To aid in navigating the compliance landscape shaped by MiCA, I will continue to share regularly published tips and insights, providing valuable guidance for obtaining CASP license in Poland:
