Poland’s crypto law dubbed ‘most restrictive in EU’ as exchanges flee to Estonia

Poland’s push to tighten digital asset oversight has triggered sharp criticism from local industry leaders, who warn that the country risks stifling its own crypto sector.

The proposed Poland Crypto-Asset Market Act, recently passed by the Sejm and awaiting Senate approval, introduces a strict licensing regime for exchanges, issuers, and other service providers. Modeled partly on the EU’s MiCA framework, the law goes further by imposing fines of up to 10 million zlotys ($2.8 million) and prison sentences of up to two years for violations.

Przemysław Kral, CEO of zondacrypto, called the bill a “prime example of overregulation” that could drive companies and talent out of Poland. “Poland has taken it too far and its domestic crypto industry will suffer as a result,” Kral told crypto.news. “Basic activities such as developing smart contracts could be criminalized.”

Kral warned that startups will struggle to meet the law’s extensive requirements on capital adequacy, compliance, and risk management. He argued that larger players would tighten their hold on the market while smaller firms are forced abroad.

Despite being founded in Poland, zondacrypto relocated its headquarters to Estonia, citing a friendlier environment. The exchange now pays over €6 million annually in VAT there—tax revenue Kral says Poland is losing due to its rigid stance.

The act would give Poland’s financial regulator, the Komisja Nadzoru Finansowego (KNF), sweeping authority to oversee the sector. Firms will have just six months after enactment to obtain a license or face closure.

Opposition lawmakers have also voiced concerns. Janusz Kowalski of the Law and Justice Party called the legislation “the largest and most restrictive cryptocurrency law in the EU,” accusing the government of misinterpreting MiCA and blocking Poland’s fintech growth.

Kral acknowledged that regulation is necessary but warned the current draft misses the balance.

“While regulation is necessary for consumer protection, it can be counterproductive,” he said.

The debate over the Poland Crypto-Asset Market Act underscores a broader challenge facing European regulators: how to protect investors without driving innovation offshore.