Cryptocurrency Wild West in the EU. Why did the alerts from Estonia not reach the Polish KNF?

Supervision over the Zondacrypto cryptocurrency exchange was very poor in Estonia, and practically impossible in Poland – said lawyer, prof. SGH Tomasz Siemiątkowski. In his opinion, the adoption of the act on the crypto-assets market is absolutely necessary and will help civilize the crypto-assets market in Poland.

PAP: Customers of the Zondacrypto cryptocurrency exchange have problems with withdrawing funds. What would have to happen for them to get it back?

Tomasz Siemiątkowski, attorney, prof. Warsaw School of Economics, head of the Department of Economic Law: Real scenarios include recapitalization of the Zondacrypto stock exchange by an investor, and more specifically of the company running it: BB Trade Estonia OU. However, with a significant deficit of funds on the stock exchange, i.e. lack of liquid funds to cover its liabilities, this may be very difficult.

Further scenarios include recovery of the exchange's funds if it has fallen victim to irregularities, or restructuring or bankruptcy. I know it sounds unpleasant, but restructuring could lead to the “healing” of the stock exchange's finances. Bankruptcy, on the other hand, serves to secure the entrepreneur's assets as much as possible and then satisfy at least some of the creditors from them. That is why bankruptcy is called general execution. However, the information arriving hour by hour increases my pessimism. It is likely that the exchange no longer has any assets that are within reach of creditors. The recovery of money invested on the Zondacrypto stock exchange depends on whether these funds exist and can be located and on the structure of companies related to Zondacrypto, which are registered in different countries. We hear that it is Estonia, Luxembourg, Dubai or Switzerland.

PAP: The president of Zondacrypto, Przemysław Kral, stated that the exchange owns a portfolio of 4.5 thousand. bitcoins worth over $300 million, but the keys to them are held by the missing Sylwester Suszek, the founder of the BitBay exchange, the predecessor of Zondacrypto. Doesn't this surprise you?

TS: Mr. Suszek went missing in March 2022. So the questions for President Kral are as follows: what has happened over the last four years in this regard? How did he run a cryptocurrency exchange without cryptographic keys and who and to which institution did he notify about it? This is an absurd translationbut the story of Zondacrypto, also under its previous name, is much more symptomatic. Well, in 2018, Sylwester Suszek moved the cryptocurrency exchange from Poland to Malta. This happened after this entity was placed on the Polish Financial Supervision Authority's warning list. In Malta, however, the company operating the Zondacrypto stock exchange was not on the local regulator's warning list. The next step was to transfer the stock exchange company to Estonia, as BB Trade Estonia OU. It is clear that already then Poland needed a legal framework for the operation of cryptocurrency exchanges. The case is very serious and legally complex, and the facts are ambiguous in many places.

PAP: What exactly do you consider ambiguous, apart from the above-mentioned issues?

TS: First of all, we do not know whether Estonian supervision worked properly, although it is difficult to talk about classic supervision of the financial market. In Estonia, as in the overwhelming majority of EU countries, the cryptocurrency market was until recently unregulated or very poorly regulated. There were neither banking standards, including increased capital requirements, nor typical supervision over the financial market, which is exercised by the Polish Financial Supervision Authority in Poland. Now that's changing. Until 2025, the Financial Intelligence Unit (FIU) supervised the cryptocurrency market in Estonia and also granted licenses. However, this is an authority much closer to the Polish Chief Inspector of Financial Information (GIFI) than to the Polish Financial Supervision Authority.

In the case of Zondacrypto, the FIU's supervision did not work properly. However, from 2025, control over the cryptocurrency market in Estonia is exercised by the Financial Supervision Authority (FSA) and plays a role similar to the Polish Financial Supervision Authority. However, this body does not really inform Poland about anything. FIU, on the other hand, deals with, among others, analyzing and providing information about Estonian entities suspected of money laundering.

Let us remember that For years, Estonia has wanted to play a role in the EU similar to the role of the state of Delaware in the US, i.e. to concentrate as many companies as possible on its territory, offering liberal solutions. This can be seen in the example of BB Trade Estonia OU, which runs the Zondacrypto stock exchange, which, as a financial institution, could take the form of a limited liability company in Estonia, which is difficult to imagine in the Polish legal system. This experiment is partially successful because in Estonia the number of companies created by the so-called foreign persons. However, Estonia pursuing such a policy in the EU may be very problematic, primarily because while in the US there is federal supervision of the financial market, in the EU this supervision is de facto national. And this creates risks that we are currently seeing with Zondacrypto.

PAP: Should the Polish General Inspector of Financial Information (GIIF) or the Polish Financial Supervision Authority receive an automatic alert from the FIU, which found the lack of an audit of BB Trade Estonia OU's own funds in 2025?

TS: In my opinion, the GIFI and the Polish Financial Supervision Authority should have absolutely received an alert from Estonia last year about the state of own funds posing a risk of insolvency of Zondacrypto. In the European Union, there is an AML directive regarding, among others, anti-money laundering, which assumes the exchange of information between the authorities of EU Member States. This obligation rested with the Estonian Financial Intelligence Unit, although it should have been implemented in coordination with the financial market supervision authority, i.e. the Financial Supervision Authority. In the case of the financial market, both the standard of services provided and the standard of supervision should be increased. This does not mean, however, that temporary liquidity problems immediately trigger the need to treat the transaction as a disposal of customer assets in conditions of insolvency and an AML alert should be sent. It depends on what exactly the Estonian authorities knew about the activities of BB Trade Estonia OÜ.

PAP: Could the company operate in Poland on a mass scale without a national license? Did our supervision have the instruments to investigate its Estonian status before it started operating in Poland?

TS: Freedom of establishment in the EU allows foreign entrepreneurs to operate in Poland, and admission to trading was automatic. Polish citizens decide for themselves who they cooperate with. They must take into account that the choice of a foreign entrepreneur, in this case Zondacrypto, carries additional risk, even if greater or less cooperation between the supervisory authorities of EU countries is possible. However, in such a case, national supervisory authorities always have limited tools to act against an entity from another Member State. I would like to point out that the acts on the crypto-assets market passed by the Parliament and vetoed by the President also granted the Polish Financial Supervision Authority powers over entities operating in Poland and having licenses issued abroad. X-ray, understood as an in-depth examination, could only be very limited. As you can see, in the Zondacrypto case, supervision was very poor in Estonia and practically impossible in Poland.

PAP: The regulations, which were vetoed twice by President Karol Nawrocki, were intended to enable Poland to fully apply the EU MiCA regulation on the crypto-assets market. The vetoed bills also introduced, among others: supervisory measures, e.g. allowed the Polish Financial Supervision Authority to suspend the public offering of cryptocurrencies. The president argued that Polish solutions are overregulation compared to the EU ones. Do you agree with this justification?

TS: Before the MiCA regulation, the crypto-asset market was completely wild in most EU countries, but in some of them this regulation is already in force. Therefore, the crypto-assets market needs to be immediately civilized also in Poland. In my opinion, it is better to overregulate the market, at least at the beginning, than to underregulate it – the new legal regulations are an obvious experiment in both social and economic terms. Personally, I do not see any over-regulation in the vetoed bills. For example, some of the American regulations introduced after the Lehman Brothers bank meltdown in 2008 were very, very restrictive, but they were the most adequate response to the lack of security of market participants.

PAP: Is the adoption of the act on the crypto-assets market in Poland able to actually fix the mistakes that made the Zondacrypto scandal possible? What should be done to reduce the risk of such situations occurring in the future?

TS: The law will be a remedy in the future, but only partially. Whatever the regulations, they will not turn cryptocurrency exchanges into banks. Of course, statutory solutions will improve the transparency of transactions and their supervision. However, operational and abuse risks will still exist and the cryptocurrency exchange client will bear them. The crypto-asset market is global, so it is inherently difficult to execute. However, I consider the implementation of MiCA through the Crypto-Asset Market Act to be absolutely necessary.

PAP: What advice would you give to people who currently hold funds on cryptocurrency exchanges?

TS: Every stock market is inherently risky, and this risk is systemic. It is important to monitor warning signals: aggressive marketing, lack of transparent reports, lack of appropriate reserves and unclear company structure.

Interview by Monika Blandyna Lewkowicz (PAP)

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