In the cases I am aware of, banks have cancelled the account agreements of their customers involved in cryptocurrency trading, most often citing risks connected with money laundering. I will not address here whether it was accurate to rely on that ground for termination of the accounts in those specific instances. Obviously, it cannot be ruled out that the banks had information from which they could reasonably suspect that the given business was involved in money laundering procedures. But terminating the bank accounts of entities in the cryptocurrency sector has become almost the norm. The scale of this phenomenon is so great that we may suspect that in many instances it has been done as a preventive measure, citing an abstract risk of money laundering. It must be clearly stated that as a rule, contrary to some popular beliefs, in Poland trading in cryptocurrencies is lawful, and businesses operating on this market enjoy the constitutional freedom to pursue economic activity.

What is the effect of termination of these customers’ bank accounts? In Poland, cryptocurrency exchanges have been driven out of business. Many exchanges clearly signalled that their decision to leave Poland or shut down was not voluntary but was forced on them by their difficulty in maintaining bank accounts. The seriousness of this unprecedented phenomenon must be stressed. These exchanges were not forced to shut down based on legally final findings by administrative authorities or judgments of courts. It turns out that there are other tools for eliminating businesses from the market. It’s enough to close their bank accounts. The effect of driving the company out of business is achieved without involving the public administration or the courts. It is not preceded by any formal proceeding where the interested party can argue its case. And once the decision is made, there is no effective avenue of appeal.

From the perspective of protection of the rights and freedoms of businesses, we are faced with the dangerous situation where one business (a bank) can unilaterally exclude another business (a cryptocurrency exchange) from trading, in many instances relying only on an abstract notion of prevention. This practice presents a real threat to the rule of law, and as such should be a focus of concern among the legal community and regulators.

The termination of bank accounts I am discussing here may directly involve businesses operating in the area of cryptocurrencies, but the significance of this controversial practice is universal. It reveals the dangers arising along with digitalisation of the economy. The architecture of the digital economic system vests special entitlements in certain entities playing a critical role in maintaining the digital infrastructure. For telecommunications infrastructure, this role is performed by telecom operators. In the context of digital payments, this role is performed by banks and other payment service providers. It is they who maintain payment accounts for businesses, without which they cannot effectively and lawfully operate.

The measures taken against businesses involved in cryptocurrencies show that along with the development of new technologies and the progressive digitalisation of commerce, the balance of power in the contemporary economy is also shifting unnoticed. Private entities (in this case banks) can take decisions exerting consequences that previously could be achieved only by operation of the state apparatus. Before, elimination of an enterprise from the market was done following appropriate procedures guaranteeing the interested party the possibility of defending its rights. But now, the same result can be achieved by terminating the agreement under which the business maintained its bank accounts. The significance of termination of this contract extends far beyond the narrow contractual relationship between the bank and its customer.

The legal system has so far failed to take note of this shifting balance of power, and has not begun to develop adequate measures to protect against actions taken by entities responsible for maintaining critical elements of digital infrastructure. This is clearly revealed by the case of cryptocurrency exchanges. Leaving aside any views on the activity pursued by such businesses, the ease with which they have been practically eliminated from the Polish market, without any formal administrative decision or judgment from any court, should give us all pause.

Krzysztof Wojdyło