Which country recently created an equal playing field for cryptocurrency companies?
Which country recently created an equal playing field for cryptocurrency companies?

Which country recently created an equal playing field for cryptocurrency companies?

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Paweł Kuskowski - CEO and Co Founder of regtech leader Coinfirm comments on recent blockchain legislation

It is not Malta, not Singapore, not even Japan… it is Poland.
The law signed by the President of Poland on the Prevention of Money Laundering and Counter-Terrorist Financing is effectively one of the most progressive laws in the world, implementing the 5th Money Laundering Directive.
In Poland, the new law was signed and to be in force from the 13th of July 2018. Although Poland is not perceived as the leader in crypto businesses this new law can open completely exciting new business opportunities. And don’t forget Poland is not a small market itself with an open access to other countries in Europe.
Ok, so what does this new law tell us? In principle, this new law treats all players in the same way, regardless if this is a bank, payment processor or… cryptocurrency exchange. If a cryptocurrency related entity complies with regulations, banks should not refuse to open an account – which is one of the largest pains for the young but growing industry. This is also the most concrete law in comparison to any country in the world. It is not a principle-based approach, but a rule-based approach describing what needs to be done to be compliant.
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So does it mean that it is now a country where you are free to operate as a cryptocurrency business? Let’s see what the law says.

The new group of entities falling into the wider group of Obliged Institutions is being created:
  1. Entities conducting operations in the field of currency exchange:
    · entities conducting economic activity consisting of providing services in the scope of:
    · exchange between virtual currencies and means of payment,
    · exchanges between virtual currencies,
    · intermediation in the exchange referred to above,
    · account - it means an electronic collection of identification data that provides eligible persons with the possibility to use virtual currency units, including transactions to exchange them,
  2. It brings the definition of virtual currency:
    virtual currency - it means a digital representation of value that is not:
    · legal tender issued by the NBP (National Bank of Poland), foreign central banks or other public administration bodies,
    · an international settlement unit established by an international organization and accepted by individual countries belonging to or cooperating with this organization,
    · electronic money within the meaning of the Act of 19 August 2011 on Payment Services, a financial instrument within the meaning of the Act of 29 July 2005 on Trading in Instruments
     · asset values - it means property rights or other movable property or real estate, means of payment, financial instruments within the meaning of the Act of 29 July 2005 on Trading in Financial Instruments, other securities, foreign exchange values, and virtual currencies; - and is exchangeable in the course of trade on legal means of payment and accepted as a medium of exchange, and may also be stored electronically or transferred or may be subject to electronic commerce;
  3. The definition of conducting transactions is quite broad and it means the execution by the obligated institution (here the exchange) of instructions or orders issued by the client or a person acting on his behalf. And transactions means a legal or actual act on the basis of which the ownership or property values are transferred, or a legal or actual act performed in order to transfer ownership or to have property values.

So what does mean to be AML compliant as a cryptocurrency exchange in Poland?

In order to be in line with the law, you need to establish: appropriate procedures, appoint a Money Laundering Reporting Officer, but most notably have the right KYC procedure and transaction monitoring in place.
KYC is pretty standard and similar to other FS. Collect documents from new clients, verify it with external sources and do it on an ongoing basis.
More complex and not standard processes are related to transaction monitoring and source of wealth and source of funds. However, being the CEO of Coinfirm, a global blockchain regtech leader, we have the solution for this part as well. It is more effective and efficient than anything in the traditional system and is recognized as a standard by banks around the world already!

Is Poland to become a center for regulated virtual currency businesses?

 It’s hard to predict at the moment, but there is certainly a standard being set and a large debate within the government and in banks, both large and established as well as the smaller challengers. It’s surely a move in the right direction and another proof that the cryptocurrencies are here to stay.
About Coinfirm
Coinfirm serves as a foundation for the safe adoption and use of blockchain. A recognized leader in their field and among the most influential blockchain and regtech companies, the blockchain agnostic Coinfirm AML/CTF Platform uses proprietary algorithms and big data analysis to provide structured, actionable data that increases efficiency, reduces costs and streamlines compliance to near automation. In addition, Coinfirm develops dedicated blockchain solutions such as their data provenance platform Trudatum, currently being piloted for adoption by multiple financial institutions. Coinfirm has also recently released their AMLT Token to allow for market participants to help rate others and democratize the financial system.
If you want to know more about doing business in the cryptocurrency space in Poland or you want to know more about AML and KYC solutions in this space, contact us at contact@coinfirm.io

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