Polish Financial Institutions Warn Against Bitcoin

While bitcoin prices skyrocketed on markets on financial institutions, the National Bank of Poland (NBP) together with the Financial Supervision Authority (KNF) issued a press release warning Polish people about the risks involved in investing in cryptocurrencies. The financial institutions clearly state that bitcoin, ether, litecoin and similar creations are not legal tenders and should not be regarded as currencies. Contrary to what some may believe, cryptocurrencies do not constitute digital money within the meaning of current legal provisions in Poland.

Even though trading in bitcoin is not against the law, state financial institutions discourage obtaining them. Investing money in cryptocurrencies entails substantial risk as their prices are very volatile. What is more, in the view of NBP and KNF, they are susceptible to cyberattacks, it is also not uncommon to come across fraud schemes targeting those willing to invest in virtual “currencies. The two institutions stress there are no legal frameworks protecting Bitcoin investors.

NBP and KNF launched a website dedicated to informing the public about the threats related to investing in cryptocurrencies. The site contains educational materials that are to provide those interested in Bitcoin and other “currencies” information about what cryptocurrency is and how it is different from the standard legal tender.

The National Bank of Poland and the Financial Supervisory Authority are not the only public institutions that noticed the rising popularity of digital “currencies”. General Inspector of Financial institutions notes bitcoin is often used for money laundering and other illegal actions.

European Banking Authority also published an opinion on the so-called “virtual currencies” in which it presents the risks of obtaining them. They recognize that cryptocurrencies have features that may attract users, such as short transaction time, low transaction costs and no need to provide sensitive information when ordering a transaction. However, the risk of losing one’s money is high.