Virtual asset service provider (VASP) license in Poland
Poland has emerged as one of the leading jurisdictions in Europe for the regulation of virtual asset service providers (VASPs) otherwise called cryptocurrency service providers, offering a robust framework that fosters innovation while ensuring investor protection and financial integrity. The introduction of the VASP license, which is oftern referred to as a crypto license, represents a significant step forward in the regulation of cryptocurrency-related activities within the country. Under this framework, various types of VASP activities, including cryptocurrency exchange services, brokerage services, and virtual currency wallet services, are subject to supervision and licensing. This article explores the key features of Poland's VASP license, eligibility criteria for obtaining the license, and its implications for businesses operating in the cryptocurrency sector.
Types of virtual asset service providers (VASP) in Poland:
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Cryptocurrency Exchange Service Providers
Offering conversion between cryptocurrencies and traditional fiat currencies. - Cryptocurrency-to-Cryptocurrency Exchange Service Providers
Enabling trading and diversification within the cryptocurrency market. - Cryptocurrency Brokerage Service Providers
Facilitating secure and regulated transactions, ensuring investor protection. - Virtual Currency Wallet Service Providers
Providing a secure platform for storing and managing various cryptocurrencies.
Companies Eligible to Apply for a VASP License (Crypto-License)
Poland's favorable regulatory environment actively encourages foreign businesses and aspiring entrepreneurs to enter the cryptocurrency market. As a result, any type of a company or sole proprietorship can apply for a VASP (Virtual Asset Service Provider) license after the company formation. This inclusive approach promotes economic development and innovation by allowing a wide range of companies to participate in regulated cryptocurrency activities.
To outline activities related to cryptocurrency transactions, it is worth defining what virtual currency is.
The European Banking Authority defined cryptocurrencies as a digital representation of value not issued by a central bank, credit institution or electronic money institution, which, under specific circumstances, can be used as an alternative to traditional money, the same definition was introduced later into the Polish legal system
Virtual currency is a much broader concept than cryptocurrency, which, in addition to cryptocurrencies such as bitcoin, also includes “currency" used in computer games or platforms, as well as various tokens.
Virtual asset services provided should be classified under the PKD code 64.19.Z - other monetary intermediation.
Registration of virtual asset service providers (VASP) in Poland
To obtain a cryptocurrency license the entity or individual should fulfil several conditions that are intended to guarantee the integrity of the business conducted.
A sole proprietor who plans to register as a virtual asset service provider (VASP) in Poland has to demonstrate no criminal record in the field of offence against economic turnover, property, money turnover, terrorism financing, credibility of documents, or offenses committed to gain financial or personal gain, as well as intentional fiscal offenses. If the activity is to be carried out in the form of a company, then the lack of criminal record requirement applies to the members of the management body, as well as the actual beneficiaries of this entity.
Virtual asset service provider (VASP) has to demonstrate knowledge or experience related to activities in the field of cryptocurrencies. This condition can be considered fulfilled if a person has completed appropriate training or course, which included legal and practical issues related to cryptocurrency trading activities. In addition, Virtual asset service providers (VASPs) who have previously carried out such activities for at least one year also meet the competence requirement.
FAQ
What is the penalty for virtual asset service providers (VASPs) in Poland failing to register?
The entrepreneur will be penalised financially up to PLN 100,000. Although compared to other penalties included in the AML Act, it is relatively small. The penalty in such cases is imposed by the minister responsible for public finance.
Should a virtual asset service provider (VASP) report a change in the registration documents related to virtual currencies services provided?
Virtual asset service providers (VASP) should report changes to the registry within 14 days from the date of the event that caused the change. The application should indicate the current type of services provided and provide the date of the change.
Can the registering authority remove a virtual asset service provider (VASP) from the registry?
The competent authority is authorised to remove the a virtual asset service provider (VASP) int he following cases:
1. Upon receipt of information about the removal the entity or individual holding a crypto license from the company registry, or
2. if the authority finds out that the VASP does not meet the conditions required by law to carry out activities related to virtual currencies, or false declarations were submitted during the registration process.
Should a virtual asset service provider (VASP) apply financial security measures?
Virtual asset service providers (VASPs) conducting such activities will be obliged to apply financial security measures in the event of occasional transactions exceeding EUR 1000.
Should a virtual asset service provider (VASP) obtain a currency exchange license?
Activities involving the exchange of virtual currencies are not regulated currency exchange activities under the the Foreign Exchange Act, hence there is no need to obtain a currency exchange license at the National Bank of Poland. On another note, the activities of entities conducting activities using cryptocurrencies are not subject to supervision by the KNF (Financial Authority), and users of cryptocurrency exchange platforms do not enjoy the same rights and transaction conditions as participants in the financial instrument trading market.
