Poland’s parliament, the Sejm, is set to begin work on up to five draft laws on cryptoassets on May 12, including proposals submitted by the government, President Karol Nawrocki and lawmakers from several parliamentary groups, according to a preliminary agenda.

The proposals are intended to implement the EU’s Markets in Crypto-Assets Regulation, known as MiCA, into Polish law. The process has been delayed after Nawrocki blocked the government’s two previous attempts to implement the regulation.

Prime Minister Donald Tusk said last week that the government would submit the cryptoasset bill to parliament for a third time. The new proposal would differ only by introducing tougher penalties for those who commit fraud and “expose the Polish state” to risk, he said.

The government and presidential drafts differ mainly on the blocking of cryptoasset accounts at the request of the Polish Financial Supervision Authority (KNF), Poland’s financial market watchdog, and on the level of penalties.

The government proposal would allow the KNF to issue a written request to a cryptoasset service provider to block a cryptoasset account or cash account for up to 96 hours where there is a justified suspicion of a breach of certain MiCA provisions.

It would also allow the KNF to extend a cash or cryptoasset account block, or suspend a specific transaction, for up to six months if needed to protect trading security or the interests of cryptoasset holders.

The presidential draft keeps the 96-hour power but limits any extension to three months and requires prior approval from an administrative court. Its justification says added judicial control would “strengthen the correctness of administrative acts”.

The Finance Ministry bill would raise the penalty for obstructing or preventing inspections from PLN20mn (€4.72mn) to PLN25mn. The presidential draft keeps the fine at PLN20mn.

Regulating the crypto market has taken on renewed urgency after Polish prosecutors launched a fraud investigation into Zondacrypto, a cryptocurrency exchange, in April.

The suspected fraud case is believed to have left up to 30,000 users unable to access funds, while Zondacrypto CEO Przemysław Kral reportedly left for Israel.

Confirmed losses stand at a minimum of PLN350mn ($97mn), with prosecutors identifying potential fraud, mismanagement and theft as lines of inquiry.

Kral’s Israeli citizenship could complicate the case, as Israel does not extradite its own nationals. His last public communication, in which he acknowledged the inaccessible cold wallet where users’ funds were allegedly kept, came before he stopped commenting publicly.

The exchange’s difficulties date back to 2022, when founder Sylwester Suszek disappeared, allegedly taking the private keys required to access company reserves. His family suspects Suszek was killed.

Kral has said no theft occurred, attributing the collapse to a liquidity crisis compounded by technical failures stemming from Suszek’s absence. Prosecutors have not accepted that account, pointing to suspicious transactions and declining reserves in the period before withdrawals were frozen.

Polish authorities have said they are also examining political donations and alleged networks of influence linking crypto industry interests to regulatory decisions. Prime Minister Donald Tusk’s government has faced accusations that this framing serves political purposes while victims await substantive redress.