Polish Court Rules Cryptocurrency Not a 'Thing,' Barring Recovery of Lost Digital Assets

Poland's Supreme Administrative Court has delivered a landmark ruling stating that cryptocurrency is not legally recognized as a 'thing,' effectively barring any legal recourse for recovering or returning lost or found digital assets. This decision has significant implications for individuals and businesses operating within the Polish financial landscape.

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The Supreme Administrative Court ruled that cryptocurrency is not a thing, so under Polish law, it cannot be found or returned like lost property.

The ruling means that if someone receives an unsolicited cryptocurrency payment from an unknown source, they cannot utilize the existing legal framework for found property to resolve the situation. This leaves them in a precarious position, potentially liable for a 19% tax on the full amount if they dispose of it and facing criminal accusations if the funds are traced to illegal activities. The inability to technically refuse such payments exacerbates the problem.

The case highlighted the plight of an individual who found cryptocurrency on their exchange account, reported it to the police and prosecutor's office, and subsequently exchanged it for fiat currency. Despite informing authorities, the individual faced a three-month freeze on their funds and an investigation that was ultimately dismissed. Years later, attempting to use the procedure for found property, they were met with a denial, as the court determined cryptocurrency does not fit the legal definition of a 'thing.'

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For an entrepreneur with a cryptocurrency wallet, this means that an unwanted payment from an anonymous sender, which cannot technically be refused, remains in their account without an exit procedure, but with the risk of funds being blocked, a 19% tax on the full amount upon disposal, and criminal charges if the funds originate from a crime.

This judicial interpretation is based on the understanding that 'things' under Polish law, specifically referencing Article 45 of the Civil Code and the Law on Found Property, are exclusively tangible, material objects. Cryptocurrency, being a digital record on a distributed ledger, does not meet this criterion. The court's decision, affirmed by lower administrative courts and the college, closes the door on any administrative or legal procedure for such cases, leaving individuals in a legal gray area regarding unsolicited digital asset transfers.

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The court's response closed the case after nearly nine years: there will be no procedure, because there is no thing. The citizen thus heard a double 'no': there is no thing, and there is not even a procedure where he could hear about it.