Since the collapse of the biggest bitcoin exchange website in the world, Mt. Gox, there have been numerous calls for consumer legislation, regulations and protections in regards to the world of peer-to-peer decentralized virtual currencies like bitcoin and litecoin. Despite railing against government, many in the bitcoin community are welcoming government intervention.
One of the latest to encourage a government to intervene in the bitcoin industry is a Polish law firm named Wardynski & Partners, which issued a press release that is suggesting an introduction of new regulations to protect bitcoin and other virtual currency users.
The law firm noted virtual currency users presently do not have the same level of protections that users of other traditional currencies and payment systems have, including a law entitled the Act on Financial Instruments in Trading. This means that digital currency theft isn’t held to the same legal standards as to that of conventional currency theft.
“For us, new technologies are all about new legal challenges. In many instances, we must tackle [the] doubts surrounding the legal treatment of innovative products and services or an absence of relevant regulations,” the law firm noted in a statement. “The possibility of applying selected provisions of the Penal Code to ‘theft’ of bitcoin demonstrates that in the area of criminal law, legislative intervention to protect the growing number of users of virtual currencies is urgently needed.”
Another concern that the Warsaw-based law firm has is the tax treatment of digital currencies. It explained that virtual currency users face tax risks and the paucity of regulations that address this matter. “The lack of regulations specifically addressing [digital currencies] means that [fiscal interpretations] of operations involving virtual currencies are derived from general regulations, which are ill-suited to the nature of such operations.”
We reported last month that the Polish government instituted a 23 percent value-added tax (VAT) against bitcoin miner; tax authorities view mining akin to a service or a sale and asking for a fee for the service.
Furthermore, we also reported earlier this month that Polish Deputy Finance Minister Wojciech Kowalczyk wrote in a document that bitcoin and other cryptocurrencies can classified as a financial instrument.
