Poland-based bitcoin payment solutions provider InPay S.A. has launched an equity crowdfunding campaign that makes it possible to buy company stock with bitcoin.

The company claims to have secured the approval of Poland’s Financial Supervision Authority (KNF), the country’s equivalent of the US Securities and Exchange Commission (SEC), which makes it a unique project in the Polish digital currency industry, according to company representatives.

The initiative was launched on Poland-based equity crowdfunding site Beesfund.com, where potential investors can acquire InPay stock with bitcoin, becoming shareholders in the company .

Paper stocks

In total, InPay is aiming to raise the equivalent of 200,000 zloty (around $60,000) from the public offering to finance its further development and expansion to other markets.

At press time, the firm had sold just over a quarter of the 5% of its stock made available in the scheme, priced at 40 zloty per share, and which has been purchased by over 100 investors so far. The offering is scheduled to be completed by November 16th.

InPay said in a statement that, unlike the reward-based crowdfunding model popularized by sites such as Kickstarter or RocketHub, equity crowdfunding enables potential investors interested in innovative business models to acquire stock in the firms.

Examples of such sites include EquityNet and Crowdcube. However, to date, none of these sites has enabled investors to purchase shares with the use of bitcoin, according to InPay.

Despite being paid for with bitcoin, InPay says that the stock will be printed on paper and sent by post to its new shareholders.

“For crowdfunding platforms, such as Beesfund, bitcoin seems to be the ideal engine for growth,” said Arkadiusz Regiec, Beesfund CEO. “It makes the whole purchase procedure much quicker and lowers transaction costs.”

Growing bitcoin market

InPay says it is the first bitcoin payment solution in Central Europe, providing services to retail outlets in a bid to remove “the obstacles facing the owners of brick-and-mortar and online stores who want to start accepting bitcoin”.

Poland is in the top 10 countries for the number of downloaded bitcoin clients, which makes it a promising market for digital currency payment operators. Data obtained by InPay shows that, in terms of active bitcoin node numbers, Poland ranks 12th and eighth at the global and European levels, respectively.

Additionally, there are more businesses accepting bitcoin in Warsaw than in a number of other major European cities, such as Munich, Brussels, Barcelona or Budapest, according to figures released by Coinmap.org.

“We use the bitcoin protocol to provide a quick and free flow of payments … for company owners, from buyer to seller,” said Lech Wilczyński, president of InPay.

Registered public offering

Wilczyński told CoinDesk that the latest venture by InPay is officially registered with the Polish financial authorities, and as such it is “completely different” from the unsuccessful attempt by bitcoin entrepreneur Eric Voorhees to launch a public offering of bitcoin securities without registering with the federal government.

According to the SEC, between 2012 and 2013, Voorhees solicited shares in two bitcoin-related ventures, SatoshiDICE and FeedZeBirds, triggering an investigation by the commission. In June 2014, the entrepreneur was banned from making such an offering for the next five years, and was forced to relinquish profits totaling $15,843.98, in addition to being imposed a penalty of $35,000.

Commenting on the affair, SEC Division of Enforcement director Andrew Ceresney said:

“All issuers selling securities to the public must comply with the registration provisions of the securities laws, including issuers who seek to raise funds using bitcoin.”

Vorhees reportedly raised more than 50,000 bitcoins from a number of investors. As a result, the SEC decided the entrepreneur had violated sections of the Securities Act of 1933. He was also accused of using online forums and social media platforms to solicit investors.

“In our case, everything was approved by the KNF. It is a public offering with shares available for purchase outside of the stock market,” Wilczyński said. “We know there are multiple platforms for stateless equity, but in this case, users receive real registered shares of the companies they invest in.”

CoinDesk was given access to documents stamped by the KNF that back up Wilczyński’s statement.

Bitcoin’s status debated

Meanwhile, Polish authorities are still debating the stance the country should adopt on digital currencies. Earlier this year, Poland’s deputy finance minister Wojciech Kowalczyk released a document confirming that, under the country’s existing financial regulations, bitcoin can be considered a financial instrument.

The Finance Ministry stated:

“Options or futures contracts which are based on [bitcoin] as a base instrument can be considered as derivative instruments, and as such, they can be considered as financial instruments, according to the bill on financial instruments.”

However, the notice also indicated that bitcoin is not an officially recognized currency in Poland.

Registered in June 2014, InPay S.A. is a limited company headquartered in Poland’s capital Warsaw. The firm was co-funded by Polish software developers Lech Wilczyński and Sławomir Więch.

Prior to the latest public offering, the site secured funds provided by local online entrepreneur Arkadiusz Osiak, the creator of one of Poland’s leading financial news sites Money.pl.

Update (16:15, 27th October): This article was updated to confirm the fact that CoinDesk was given access to documentation regarding the KNF approval.

Disclaimer: This article should not be viewed as an endorsement of any of the companies mentioned. Please do your own extensive research before considering investing any funds in these products.

Crowdfunding image via Shutterstock