The Polish virtual currency and blockchain community, in an effort to self-regulate in the absence of governmental regulation, has compiled a set of best practices for entrepreneurs and businesses operating the ecosystem.  The best practices canon is an effort to create unified standards with the aim of allowing this burgeoning technology to reach its full potential and transform Poland “from paper to digital” (a phrase that the Polish government has previously used for its initiative to incorporate virtual currency and the underlying blockchain technology into government operations).  Participants jointly drafted the canon to emphasize “the importance of high quality services provided by entrepreneurs ... in the [crypto] industry.” The canon is based on the premise that the long-term success of this rapidly growing industry “depends on satisfied customers and business partners as well as ethical attitudes towards competitors.” As a result, the canon covers a wide-range of virtual currency and blockchain business practices from internal operations to communications with public authorities and consumer protection.

The canon advises businesses to establish responsible practices by “operat[ing] in accordance with GAAP standards” and “limit[ing] … the number of persons with unlimited (full independent) access to all funds invested by entrepreneurs.” In order to minimize the potential for fraud, the canon places responsibility on a business’ partners, managers, employees, and outsourcers to “inform themselves about all the processes related to the service process, in particular security incidents that may affect security measures and data processed.”

For communications with customers, public authorities, and contractors, the canon advises businesses to be transparent and incorporate open channels of communication about “each aspect of their activities,” such as communications about planned breaks in service due to maintenance, which should be no more than 48 hours per month. The canon also includes several consumer protection standards, such as requiring businesses to use customer data solely for providing contractual services, not allowing businesses to limit their liability for non-performance, and advising businesses to treat customers and contractors as equals. The canon further recommends that businesses “strictly adher[e] to the applicable anti-money laundering laws and, in particular, declare compliance with the obligation to identify counterparties, record, archive and report operations, honor disposal from authorized persons, and transfer funds by bank accounts.”

In order to foster the general public’s acceptance of virtual currency and blockchain technology, the canon advises companies to “explain to the public administrations all aspects of the technology and the functioning of the digital world in contemporary social and economic realities,” and express their willingness to cooperate more closely with the judicial branch.

            This compilation of best practice standards is a positive step for the Polish virtual currency and blockchain community.  As written, the standards strike a positive balance between consumer protection and industry innovation. Ideally, in Poland and elsewhere, virtual currency and blockchain industry participants will continue to voluntarily establish standards of conduct that will allow the technology to continue to gain traction and ease the eventual transition to governmental regulation.  Moreover, regulators will hopefully consider these types of best practices when adopting legislation.