Tag: cryptocurrency

Poland Eyes Crypto Hub Status as Coinbase Grapples with Illinois BIPA Lawsuit

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Coinbase Faces Class-Action over Biometric Privacy

On May 13, 2025, three Illinois residents—Scott Bernstein, Gina Greeder and James Lonergan—filed a federal class-action lawsuit against Coinbase, alleging that its Know-Your-Customer (KYC) identity-verification processes violate the state’s Biometric Information Privacy Act (BIPA). They claim that by requiring users to upload a government-issued photo ID and a selfie, then routing those images through third-party facial-recognition vendors (including Jumio, Onfido, Au10tix and Solaris) without first providing written notice or obtaining informed consent, Coinbase “wholesale[ly] collects […] faceprints” in clear breach of BIPA’s disclosure and consent provisions.

Moreover, the plaintiffs assert that Coinbase has never published a retention schedule or guidelines for permanently destroying biometric identifiers, another express requirement under BIPA. They further allege that over 10,000 individual arbitration demands over the same issue were dismissed after Coinbase allegedly refused to pay American Arbitration Association fees, effectively sidestepping those users’ claims. The suit seeks statutory damages of $5,000 per willful or reckless violation, $1,000 per negligent violation, injunctive relief, and reimbursement of litigation costs.

Poland’s Opportunity to Become a Crypto Hub

Meanwhile, in Katowice at the European Economic Congress, President of Binance Poland, argued that Poland is no longer a “niche” player but on track to become a major European crypto hub. Polish crypto-asset users numbered around 3 million just last year and may now exceed 4 million—remarkably close to the roughly 5 million retail brokerage accounts in the country—underscoring widespread adoption and public openness to digital-asset innovation.

Yet, Poland remains one of the few EU member states yet to implement local legislation to transpose the Markets in Crypto-Assets (MiCA) regulation into national law. By integrating robust legal compliance for exchanges and crafting forward-looking domestic rules, Europe’s crypto ecosystem—including Poland—can both protect users and retain innovation in an increasingly competitive global landscape.

Crypto Investments – What Responsibilities Rest on Company Boards

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In recent months, the cryptocurrency market has sparked significant interest. In December 2024, Bitcoin reached a milestone when its price surpassed $100,000. This event not only surprised investors but also prompted the boards of capital companies to explore new opportunities for allocating capital.

1. Bitcoin – A New Era

Bitcoin has long served as a benchmark in the world of digital currencies. Crossing the $100,000 threshold is more than just a figure—it signals that the crypto market is reaching a new level of maturity and investor interest. For companies, this presents an opportunity for substantial growth in accumulated funds, but it also carries the potential risk of sharp declines. For boards, this introduces exposure to legal liability risks.

2. Capital Protection

The starting point for further considerations is the fundamental duty of board members to act with due diligence and loyalty towards the company, while operating within the bounds of justified economic risk. Under European standards, board members are expected to exercise the care and skill reasonably expected of someone in their position. They are also accountable for any damage caused by actions or omissions that contravene the law or the company’s articles of association, unless they can demonstrate they are not at fault.

Bitcoins

A key responsibility of the board is to safeguard the company’s capital and net profits. Amid rising inflation, earned but “idle” profits lose value, potentially exposing the board to liability for damages linked to the decline in capital value corresponding to the inflation rate. This is why companies are increasingly considering alternative capital allocation strategies. Investments in cryptocurrencies, despite their volatility, offer a means of portfolio diversification. However, these financial instruments may expose the board to accusations of exceeding the limits of justified economic risk.

From the perspective of a company’s board, the following issues are critical:

  • The legality of investing company funds in cryptocurrencies,
  • The legality of the platform used to acquire these assets,
  • The process of selecting the purchasing platform and the specific asset (currency or token),
  • Documentation of the decision-making process and prior analyses,
  • Compliance with obligations under anti-money laundering (AML) regulations and proper tax settlement of cryptocurrency profits.

3. Legality of Cryptocurrency Assets

European law does not prohibit companies from acquiring cryptocurrencies. These are fully legal assets within the scope of legal transactions. Any company, regardless of size, may choose to invest by purchasing digital assets. The legality of cryptocurrencies is supported by an increasing number of legal regulations at the European level, including tax frameworks. By recognizing the acquisition of digital assets and the profits derived from their sale, legislators have classified these profits as taxable capital gains.

4. Legality of the Purchasing Platform – Exchange

Until December 31, 2024, the legality of cryptocurrency purchasing platforms was overseen through national registers of virtual currency activities maintained by financial supervisory authorities across Europe. These registers ensured that entities operating in the virtual currency sector complied with applicable laws. Under AML regulations, such activities could only be conducted by entities registered accordingly, with legally operating platforms typically displaying their registration details publicly.

From January 1, 2025, these national registers have been superseded by a unified European register (detailed below). However, until June 30, 2026, national registers remain a valid tool for verifying counterparties during the transitional period. AML regulations thus affirm the legality of acquiring and profiting from cryptocurrency assets.

5. MiCA Regulation and CASP License

As of December 31, 2024, the cryptocurrency market in the European Union is governed by Regulation (EU) 2023/1114 of the European Parliament and Council, commonly known as MiCA (Markets in Crypto-Assets). This regulation aims to standardize the rules for trading crypto-assets, enhancing investor protection and market stability. MiCA covers the issuance, offering, and provision of services related to crypto-assets.

Under MiCA, entities providing crypto-asset services must obtain a Crypto-Asset Service Provider (CASP) license to operate within the EU. This license enables the use of a single European passport, allowing services authorized in one member state to be offered across the entire single market. National financial supervisory authorities, such as those in individual EU countries, oversee the crypto-asset market and issue CASP licenses.

6. Two Parallel Registers Until June 30, 2026

The MiCA Regulation establishes a transitional period, permitting entities listed in national registers to continue operations until June 30, 2026, as stipulated in Article 143(3) of MiCA. Entities applying for a CASP license by May 1, 2026, may extend their activities until September 30, 2026, per Article 143(4). After this period, all entities in the cryptocurrency market must hold a CASP license to operate legally in the EU. National legislators may shorten this transitional period, though no such changes have been implemented to date.

For company boards, this dual framework allows verification of entities through which investments are made. Until June 30, 2026, both national registers and the CASP license register, maintained by the European Securities and Markets Authority (ESMA), should be consulted to ensure the legality of service providers.

7. AML Obligations from the Perspective of a Company Purchasing Cryptocurrency Assets

AML obligations apply to a specific group of obliged institutions, including cryptocurrency exchanges and digital currency platforms. Companies purchasing cryptocurrencies for their own use, rather than as part of regulated activities, are not directly subject to AML requirements. The responsibility for compliance lies with the service providers facilitating transactions, who must implement Know Your Customer (KYC) procedures, monitor transactions, and report suspicious activities to relevant authorities.

Nonetheless, company boards should ensure transaction transparency. Providing accurate identity verification data to exchanges or digital platforms is a requirement under AML regulations, aimed at preventing anonymous transactions that could facilitate money laundering or terrorism financing. While AML rules do not mandate reporting the mere acquisition or possession of cryptocurrencies, profits from their purchase and sale trigger tax obligations that must be declared in line with applicable tax regulations.

Crypto Capital: A Guide to Smart Corporate Investments in Digital Assets

On By marlenawachLeave a comment

In December 2024, Bitcoin broke the $100k barrier—a milestone that reverberated across global financial markets and sparked a new wave of interest among corporations. As traditional cash holdings face the threat of inflation, companies worldwide are exploring innovative ways to protect and grow their capital. This guide offers practical insights for corporate leaders considering an investment in cryptocurrencies, outlining both the opportunities and the challenges in today’s dynamic digital asset landscape.

Bitcoin: The Digital Gold Standard

Bitcoin has emerged as the flagship of digital assets. Its recent milestone isn’t just a headline—it represents the maturity of a market that’s increasingly recognized as a legitimate asset class. As businesses search for alternatives to traditional savings methods, Bitcoin offers a unique hedge against inflation, backed by its limited supply and growing institutional acceptance.

Protecting Company Capital

For corporate management, safeguarding capital is paramount. With inflation eroding the value of cash reserves, diversifying investments is no longer optional—it’s a necessity. While cryptocurrencies like Bitcoin are inherently volatile, their potential to deliver high returns can, when managed wisely, provide a valuable counterbalance to conventional assets. Smart management means not risking the entire treasury on crypto but allocating a calculated portion that aligns with the company’s risk tolerance and long-term goals.

Navigating Global Regulatory Landscapes

Investing in digital assets requires adherence to international regulatory standards and best practices. While regulations vary by country, the key takeaway is to work with reputable, regulated platforms and financial service providers. Companies should ensure that every transaction is transparent, properly documented, and compliant with global anti-money laundering (AML) standards and tax regulations. Staying informed about evolving regulations across jurisdictions will help protect investments and maintain corporate integrity.

Crafting a Robust Investment Strateg

A thoughtful approach to investing corporate capital in cryptocurrencies involves several key steps:

  • Set a Clear Budget: Only allocate funds that won’t jeopardize day-to-day operations. Treat this as a strategic investment rather than speculative gambling.
  • Choose Reputable Platforms: Work with established exchanges and brokers that offer high security standards, including advanced methods like cold storage for digital assets.
  • Diversify Your Holdings: Instead of putting all your capital into Bitcoin, consider a mix of leading cryptocurrencies—such as Ethereum, Solana, or Polkadot—to spread risk across different technological innovations.
  • Risk Management: Establish protocols for monitoring market volatility. Utilize stop-loss orders, and consider gradually scaling into positions rather than investing a lump sum all at once.
  • Consult Experts: Engage with financial advisors and legal consultants to develop a strategy tailored to your company’s unique financial landscape.

Weighing the Risks

Investing in cryptocurrencies carries inherent risks that corporate leaders must understand:

  • High Volatility: Prices can swing dramatically within short periods, meaning potential for both substantial gains and steep losses.
  • Cybersecurity Threats: Digital assets are a prime target for hackers. Robust security measures—such as offline storage and multi-factor authentication—are essential.
  • Regulatory Uncertainty: The global regulatory environment is still evolving. Companies must stay agile and adjust strategies as new laws and guidelines emerge.
  • Market Liquidity: While major cryptocurrencies are highly liquid, some digital assets can be harder to sell quickly in turbulent markets.

Seizing the Opportunity

Cryptocurrencies not only offer a hedge against inflation

Despite these risks, the potential rewards of integrating digital assets into a corporate investment portfolio are compelling. Cryptocurrencies not only offer a hedge against inflation but also a pathway to impressive returns as the market continues to mature. Moreover, a strategic crypto investment can signal to investors and partners that your company is forward-thinking and adaptable in a rapidly changing economic landscape.

Conclusion

In today’s fast-evolving financial ecosystem, investing corporate capital in cryptocurrencies is more than a trend—it’s a strategic decision to future-proof your business. By carefully assessing risks, partnering with reputable platforms, and diversifying investments, companies can leverage digital assets to safeguard and potentially enhance their capital.

Take the time to build a robust, well-informed strategy that aligns with your company’s long-term vision. With the right approach, digital assets can become a valuable component of your corporate investment portfolio, opening doors to innovative growth opportunities in the new era of finance.

Embrace the future of investment and position your company at the forefront of the digital asset revolution.