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Polish lawmakers have approved new cryptocurrency regulations as authorities investigate a major fraud case linked to the collapse of the country’s largest crypto exchange, Zondacrypto. The new legislation aligns Poland with the European Union’s Markets in Crypto-Assets (MiCA) rules, which member states must implement by July.

The investigation centers on allegations that thousands of Zondacrypto users were unable to access their funds, with estimated losses exceeding 350 million zlotys ($95 million). Polish Prime Minister Donald Tusk has claimed the exchange may have connections to Russian criminal networks, intensifying political tensions and calls for stricter oversight of the crypto sector.

The scandal has also sparked a political dispute after President Karol Nawrocki previously blocked similar legislation, arguing that heavy regulations could drive crypto companies out of Poland. However, officials warn that failure to implement the EU rules by the July deadline could prevent Polish firms from legally offering crypto-related services.

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Poland has demanded explanations from Hungary and the United States after former Justice Minister Zbigniew Ziobro, wanted on abuse of power charges, reportedly travelled from Hungary to the US despite having his passport revoked. Polish officials said they want to know what legal documents allowed Ziobro to leave Hungary and enter the United States while facing criminal charges in Poland.

Ziobro and his former deputy Marcin Romanowski had earlier been granted asylum in Hungary under Prime Minister Viktor Orbán’s government. Warsaw had hoped political changes in Hungary following recent elections could pave the way for their return to Poland for trial. Romanowski’s current whereabouts remain unknown, while Ziobro confirmed in an interview that he is now in the United States and will work as a political commentator for a Polish broadcaster supportive of the nationalist Law and Justice (PiS) party.

The former minister is accused of misusing funds intended for crime victims for political purposes and faces 26 charges linked to abuse of power. Ziobro was also a key architect of judicial reforms introduced during the PiS government between 2015 and 2023, reforms that drew criticism from the European Union over concerns about weakening judicial independence in Poland.

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Poland’s Foreign Minister Radoslaw Sikorski has revealed that Warsaw is actively considering a proposal from Kyiv to intercept Russian missiles over Ukrainian airspace before they reach Polish territory. This initiative emerged from a joint defense agreement signed during President Volodymyr Zelensky’s recent visit to Warsaw. The aim is to address concerns about Russian missiles inadvertently breaching Polish airspace while targeting Ukrainian locations near the Polish border.

Sikorski emphasized that the proposal is currently in the exploration phase. It seeks to mitigate risks posed by missile debris falling into Polish territory, which could endanger citizens and property. The Foreign Minister noted the brief window of time Poland has to react when missiles traverse western Ukraine towards its borders. He stressed the need for consultation with NATO allies, particularly highlighting the importance of U.S. support in any decision to implement such intercepts.

Defense analysts have cautioned that without strong allied backing, the proposal could expose Poland to potential Russian retaliation. The effectiveness and safety of such intercept operations remain critical considerations amidst ongoing tensions and military maneuvers in the region.

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In Poland’s recent general election, the opposition parties have gathered enough votes to remove the ruling right-wing populist Law and Justice (PiS) party from power. The National Election Commission confirmed PiS’s victory with 35.38% of the vote, surpassing the centrist opposition Civic Coalition led by Donald Tusk, which secured 30.7%.

Donald Tusk, with the support of the center-right Third Way and New Left parties, is likely to form a broad coalition, thus ending PiS leader Jaroslaw Kaczynski’s eight-year rule. With 248 seats in the 460-seat Sejm, Mr. Tusk’s coalition would exceed the 231-seat threshold required for a majority.

Despite PiS losing 41 seats compared to the last election, their potential coalition with the far-right Confederation party would still fall short by 19 seats. The opposition had alerted Poles that this election was crucial in safeguarding democracy. Voter turnout was reported at 74.38%, the highest since the fall of communism in 1989.

Celebrations erupted in Warsaw, with Mr. Tusk addressing enthusiastic supporters, emphasizing that Poland and democracy had emerged victorious. Warsaw Mayor Rafal Trzaskowski praised the power of civil society, highlighting the significant voter participation in the capital.

Poland’s stock market surged more than 6%, and the Zloty, its currency, also strengthened on the anticipation of a new government. International observers noted that although parties were allowed to campaign freely, PiS had an advantage due to biased state media coverage and the misuse of public funds.

PiS’s tenure has been characterized by an emphasis on Catholic family values, increases in the minimum wage, and enhancements in child support and pensioner payments. It also imposed a near-total ban on abortion in 2021 and faced criticism for politicizing the judiciary.

Mr. Tusk has pledged to improve relations with the EU and unlock €36bn of EU Covid pandemic recovery funds, frozen due to disputes over PiS’s judicial reforms. His coalition also aims to liberalize abortion laws.

Poland’s strong support for Ukraine since Russia’s invasion and its acceptance of a million refugees are expected to continue under the new government. However, the process of forming a new government might extend until December, following President Andrzej Duda’s announcement that the winning party would be given the first opportunity to form a coalition, adhering to Polish tradition.

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