Nawrocki Faces First Major Test After Sweeping Bill Sparks Backlash

Poland’s newly elected President Karol Nawrocki is being cast as the last line of defense for the country’s crypto industry after lawmakers advanced one of the most restrictive digital asset laws in the European Union.

The Crypto-Asset Market Act (Bill 1424), approved by the Sejm last week, introduces sweeping licensing rules, severe fines, and even prison terms for violations. Now, as the bill heads to the Senate, the future of Poland’s three million crypto holders may rest on whether Nawrocki keeps his campaign promise to block “tyrannical regulations.”

The Sejm voted 230 in favor and 196 against, passing legislation modeled on the EU’s Markets in Crypto-Assets Regulation (MiCA) but widely seen as going much further in scope. Critics warn it could devastate Poland’s digital economy, while supporters argue it is necessary to protect investors and bring legitimacy to the sector.

Bill 1424 mandates that all crypto asset service providers (CASPs) — from exchanges and token issuers to custodians, whether domestic or foreign — must obtain a license from the Komisja Nadzoru Finansowego (KNF), Poland’s notoriously slow-moving financial regulator.

To secure approval, CASPs must disclose detailed information about their corporate structure, capital adequacy, risk management systems, AML procedures, and compliance frameworks. Firms will have only six months to comply, an unusually short timeline that industry insiders say will be unworkable for smaller startups.

Unlicensed operations risk forced shutdowns, fines of up to 10 million Polish zlotys ($2.8 million), and prison sentences of up to two years. These penalties, critics argue, far exceed MiCA’s baseline requirements and could choke Poland’s crypto market before it matures.

Protection Or Strangulation Of Crypto Market

Coalition, insist the reforms are vital to protect investors and align Poland with EU-wide standards. They argue that greater regulatory oversight will bring legitimacy to an industry long criticized for opacity, while shielding Poland’s financial system from systemic risks.

Opponents, however, describe the law as regulatory overkill. Janusz Kowalski, an MP from the opposition Law and Justice (PiS) party, branded it the “largest and most restrictive cryptocurrency law in the EU.” He emphasized its 118-page length, contrasting it with far leaner frameworks: Germany’s 78 pages, the Czech Republic’s and Lithuania’s 22 pages each, and Cyprus’s single-page regulation.

Tomasz Mentzen, a blockchain advocate and politician, warned the bill will bury innovation under mountains of red tape. He highlighted that the KNF is the “slowest-acting regulator in the EU,” taking an average of 30 months to review applications — a delay he said would cripple startups, create bottlenecks, and push companies abroad.

The backlash has extended beyond parliament. Dominik Fel, a prominent Bitcoin supporter, warned that Poland risks turning into a “museum of innovation.” He described the legislation as a defective policy recognized as harmful and urged the crypto community to mobilize against it.

Can Nawrocki Deliver on His Word?

President Karol Nawrocki has positioned himself as a champion of innovation, campaigning on promises to resist overregulation and promote blockchain growth. In the run-up to his June 2025 victory, he pledged to “stand up against tyrannical regulations” and protect Poland’s crypto community.

Just days before the election, he reassured voters on X:

“Innovations must emerge, not regulations. As President of the Republic of Poland, I will be the guarantor that tyrannical regulations restricting your freedom do not come into effect.”

With the Senate now reviewing Bill 1424, Nawrocki faces his first major test. His decision could determine whether Poland remains a hub for its three million crypto holders or becomes another case study in how excessive regulation can suffocate an emerging industry.

Poland’s attempt to align with MiCA has veered into regulatory overreach, threatening to undermine the very innovation it claims to safeguard. While tighter compliance and licensing can protect investors and deter fraud, the combination of sweeping requirements, harsh penalties, and sluggish regulators risks driving businesses abroad instead of building a competitive crypto hub at home.

For now, all eyes are on President Nawrocki. If he holds firm on his campaign promise, he could shield Poland’s crypto market from regulatory strangulation and carve out space for balanced oversight. If he wavers, however, Poland may end up trading growth for control — and losing its chance to be a leader in Europe’s blockchain future.