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Bulgaria

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#180
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Archived
Created
2025-04-12 06:53
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Live

Executive Summary

Retail cryptocurrency trading is legally permitted in Bulgaria but regulated, primarily through AML laws and the upcoming MiCA framework. The primary regulators are the Bulgarian National Bank (BNB) and the Financial Supervision Commission (FSC). Key requirements for intermediaries include AML/KYC compliance and licensing under MiCA, which is being implemented through the Crypto-Asset Markets Act (CAMA). Cryptocurrencies are treated as financial assets, subject to taxation, and are not considered legal tender.

Key Pillars

The primary regulator is the Financial Supervision Commission (FSC), along with the Bulgarian National Bank (BNB) for e-money token issuers; however, both have issued general warnings about the risks. Core compliance requirements include AML/KYC procedures mandated by the Measures Against Money Laundering Act (MAMLA), implementing EU AML directives. Licensing or registration is required for crypto-asset service providers (CASPs) under MiCA, with a transitional period for already registered entities. The National Revenue Agency (NRA) also plays a role in AML registration.

Landmark Laws

The key legislations impacting retail crypto trading are:

  • Measures Against Money Laundering Act (MAMLA): Transposes EU AML directives, including the 5th AMLD, requiring CASPs to register with the NRA, implement AML/KYC procedures, and report suspicious activities.
  • Markets in Crypto-Assets (MiCA) Regulation (EU) 2023/1114: Came into force in June 2023, with key provisions applying from June 30, 2024 (for stablecoins) and December 30, 2024 (for other crypto-assets and CASPs). Establishes a harmonized EU-wide regulatory framework for crypto-asset issuers and service providers.
  • Crypto-Asset Markets Act (CAMA): A draft national legislation to implement MiCA, designating the FSC as the primary competent authority for supervising CASPs and most crypto-asset issuers.

Considerations

Cryptocurrencies are treated as financial assets for tax purposes. Income from their sale or exchange is subject to personal income tax, generally at a 10% flat rate, potentially 15% if deemed professional activity. The Bulgarian National Revenue Agency (NRA) treats cryptocurrencies as financial assets. Risks associated with virtual currencies are acknowledged and warnings have been issued by the Bulgarian National Bank (BNB) and the Financial Supervision Commission (FSC). There are no specific fiat access limitations mentioned in the report other than AML/KYC procedures for service providers.

Notes

A quote from Ruskov & Kollegen in Nov 2017 noted that activities associated with buying, selling and paying with Bitcoins were not regulated by an applicable national and European law and were not subject to licensing requirements; however, that is now dated, as regulation via AML and MiCA now applies. CAMA is expected to be adopted during 2025. CASPs registered with the NRA under AMLA rules before December 30, 2024, can continue operating without a MiCA license until December 31, 2025, or until their MiCA authorization is granted or denied. This report is based on information available up to April 12, 2025, and the regulatory landscape, particularly concerning MiCA implementation, is evolving.

Detailed Explanation

As of April 12, 2025, retail cryptocurrency trading is Allowed-Regulated in Bulgaria. There's no specific Bulgarian law banning individual crypto trading, but the activity is not unregulated. Historically, the Bulgarian National Bank (BNB) and Financial Supervision Commission (FSC) adopted a liberal approach, allowing crypto activities within the existing legal framework while issuing risk warnings. Cryptocurrencies are recognized as financial assets for tax purposes by the National Revenue Agency (NRA), though not considered legal tender, electronic money, or financial instruments under specific acts like the Markets in Financial Instruments Act.

The primary regulations stem from anti-money laundering (AML) and the EU's Markets in Crypto-Assets (MiCA) Regulation (EU) 2023/1114. Bulgaria transposed EU AML Directives via the Measures Against Money Laundering Act (MAMLA), requiring certain crypto-asset service providers (CASPs) like exchanges and custodian wallet providers to register with the NRA, implement AML/KYC procedures, appoint compliance officers, and report suspicious activities to the Financial Intelligence Directorate of the State Agency for National Security (SANS). MiCA came into force in June 2023, with key provisions applying from June 30, 2024 (for stablecoins) and December 30, 2024 (for other crypto-assets and CASPs). MiCA establishes a harmonized EU-wide framework for crypto-asset issuers and service providers, including licensing requirements, operational standards, investor protection, and market abuse prevention.

Bulgaria has drafted the Crypto-Asset Markets Act (CAMA) to implement MiCA, designating the FSC as the primary competent authority for supervising CASPs and most crypto-asset issuers, while the BNB will oversee e-money token issuers. Although CAMA is pending final adoption (expected in 2025), MiCA is directly applicable. A transitional period allows CASPs registered with the NRA under AMLA rules before December 30, 2024, to continue operating without a MiCA license until December 31, 2025, or until their MiCA authorization is granted or denied. After this period, only MiCA-authorized entities can provide services.

Therefore, while individuals can freely trade, the platforms and services they use are increasingly subject to regulation, primarily concerning AML/CFT compliance and MiCA, mandating licensing and operational standards for service providers. Income from cryptocurrency transactions (sale/exchange) is considered income from financial assets and is subject to personal income tax (generally 10%, potentially 15% if deemed professional activity). The information is based on information available up to April 12, 2025, and the regulatory landscape, particularly concerning MiCA implementation, is evolving.

Summary Points

Retail Cryptocurrency Trading Status in Bulgaria (April 12, 2025)

Overall Status: Allowed-Regulated

1. Regulatory Bodies & Roles:

  • Financial Supervision Commission (FSC):
    • Primary competent authority for supervising Crypto-Asset Service Providers (CASPs) and most crypto-asset issuers under MiCA.
    • Responsible for licensing and overseeing CASPs.
  • Bulgarian National Bank (BNB):
    • Oversees e-money token issuers under MiCA.
  • National Revenue Agency (NRA):
    • Registers certain CASPs under the Measures Against Money Laundering Act (MAMLA).
    • Treats cryptocurrencies as financial assets for tax purposes.
  • Financial Intelligence Directorate of the State Agency for National Security (SANS):
    • Receives reports of suspicious activities from CASPs.

2. Key Legislation & Regulations:

  • Measures Against Money Laundering Act (MAMLA):
    • Transposes EU AML Directives (including the 5th AMLD) into Bulgarian law.
    • Requires certain CASPs to register with the NRA, implement AML/KYC procedures, and report suspicious activities.
  • Markets in Crypto-Assets (MiCA) Regulation (EU) 2023/1114:
    • Directly applicable in Bulgaria as an EU member state.
    • Establishes a harmonized EU-wide regulatory framework for crypto-asset issuers and service providers.
    • Key provisions apply from June 30, 2024 (for stablecoins) and December 30, 2024 (for other crypto-assets and CASPs).
  • Crypto-Asset Markets Act (CAMA) (Draft):
    • National legislation drafted to implement MiCA in Bulgaria.
    • Designates the FSC as the primary competent authority for supervising CASPs.
    • Pending final adoption by Parliament (expected during 2025).

3. Compliance Requirements:

  • For Crypto-Asset Service Providers (CASPs):
    • Registration/Licensing:
      • Currently, registration with the NRA under MAMLA is required for certain CASPs (e.g., exchanges, custodian wallet providers).
      • After the transitional period (ending December 31, 2025), MiCA authorization from the FSC will be mandatory.
    • AML/KYC:
      • Implement robust AML/KYC procedures (customer identification, transaction monitoring).
      • Appoint compliance officers.
      • Report suspicious activities to the Financial Intelligence Directorate of SANS.
    • Operational Standards:
      • Comply with operational standards set by MiCA, including investor protection rules and market abuse prevention.
  • For Retail Users:
    • Undergo KYC checks when using regulated platforms.
    • Declare and pay taxes on income from cryptocurrency transactions.

4. Restrictions & Limitations:

  • Cryptocurrencies are not considered legal tender, electronic money, or financial instruments under specific Bulgarian acts.
  • CASPs must comply with AML/KYC regulations, which may require users to provide personal information.
  • After the transitional period, only MiCA-authorized entities can provide crypto services in Bulgaria.

5. Recent Developments & Changes:

  • MiCA Implementation: Bulgaria is in the process of implementing MiCA through the draft Crypto-Asset Markets Act (CAMA).
  • Transitional Period: CASPs registered with the NRA under AMLA rules before December 30, 2024, can continue operating without a MiCA license until December 31, 2025, or until their MiCA authorization is granted or denied.
  • Taxation: Income from cryptocurrency transactions (sale/exchange) is considered income from financial assets and is subject to personal income tax (generally 10%, potentially 15% if deemed professional activity).

Disclaimer: This report is based on information available up to April 12, 2025. The regulatory landscape, particularly concerning MiCA implementation, is evolving. Primary legal texts and official communications from the FSC, BNB, and NRA should be consulted for definitive guidance.

Full Analysis Report

Report: Retail Cryptocurrency Trading Status in Bulgaria

Date: April 12, 2025

Topic: Retail_Trading_Status

Description: Assessment of the legal permissibility for individual citizens and residents in Bulgaria to buy, sell, and hold cryptocurrencies, including the regulatory environment surrounding this activity (e.g., KYC/AML requirements, official warnings).

1. Current Status: Allowed-Regulated

2. Narrative Explanation:

Individual citizens and residents in Bulgaria are legally permitted to buy, sell, and hold cryptocurrencies. There is no specific Bulgarian law that explicitly bans or restricts retail cryptocurrency trading activities for individuals. However, the activity is not unregulated.

Historically, Bulgarian authorities, including the Bulgarian National Bank (BNB) and the Financial Supervision Commission (FSC), have adopted a relatively liberal approach, allowing crypto activities to develop within the existing general legal framework, while also issuing warnings about the risks associated with virtual currencies. Cryptocurrencies are generally not considered legal tender, electronic money, or financial instruments under specific Bulgarian acts like the Markets in Financial Instruments Act, but they are recognized as financial assets for tax purposes by the National Revenue Agency (NRA).

The primary regulation impacting retail trading stems from two main areas:

  • Anti-Money Laundering (AML) / Counter-Financing of Terrorism (CFT): Bulgaria has transposed EU AML Directives (including the 5th AMLD) into its national law, primarily through the Measures Against Money Laundering Act (MAMLA). This act brings certain crypto-asset service providers (CASPs), such as exchanges (crypto-fiat and crypto-crypto) and custodian wallet providers, under its scope. These entities are required to register with the National Revenue Agency (NRA), implement robust AML/KYC procedures (customer identification, transaction monitoring), appoint compliance officers, and report suspicious activities to the Financial Intelligence Directorate of the State Agency for National Security (SANS). While these regulations primarily target service providers, they indirectly impact retail users through the KYC checks they must undergo when using these platforms.
  • EU Regulation (MiCA): As an EU member state, Bulgaria is subject to the Markets in Crypto-Assets (MiCA) Regulation (EU) 2023/1114. MiCA came into force in June 2023, with key provisions applying from June 30, 2024 (for stablecoins) and December 30, 2024 (for other crypto-assets and CASPs). MiCA establishes a harmonized EU-wide regulatory framework for crypto-asset issuers and service providers, including licensing requirements, operational standards, investor protection rules, and market abuse prevention.
    • Bulgaria has drafted national legislation (the Crypto-Asset Markets Act - CAMA) to implement MiCA, designating the Financial Supervision Commission (FSC) as the primary competent authority for supervising CASPs and most crypto-asset issuers, while the Bulgarian National Bank (BNB) will oversee e-money token issuers.
    • Although the national implementation act (CAMA) is still pending final adoption by Parliament (expected during 2025), MiCA is directly applicable.
    • A transitional period is foreseen: CASPs already registered with the NRA under AMLA rules before December 30, 2024, can continue operating in Bulgaria without a MiCA license until December 31, 2025, or until their MiCA authorization is granted or denied. After this period, only MiCA-authorized entities can provide services.

Therefore, while individuals can freely trade, the platforms and services they use are increasingly subject to regulation, primarily concerning AML/CFT compliance and, crucially, the comprehensive MiCA framework which mandates licensing and operational standards for service providers across the EU, including Bulgaria. Income from cryptocurrency transactions (sale/exchange) is considered income from financial assets and is subject to personal income tax (generally 10%, potentially 15% if deemed professional activity).

3. Supporting Excerpts:

  • On Legality & Lack of Specific Ban: "The activities associated with buying, selling and paying with Bitcoins are not regulated by an applicable national and European law and are not subject to licensing requirements." (Ruskov & Kollegen, Nov 2017 - Note: While dated, the core point about lack of a specific ban remains valid, though regulation via AML and MiCA now applies). "There is no need to obtain a crypto license in Bulgaria for transactions related to cryptocurrency... Bulgaria has no special crypto license for crypto activities, as cryptocurrencies (bitcoins, altcoins) are perceived, verified, and declared as financial assets." (Gofaizen & Sherle)
  • On AML Regulation: "The main law regulating crypto businesses in Bulgaria is the Measures Against Money Laundering Act (MAMLA)... It partly transposed the provisions of the 5th EU Anti-Money Laundering Directive... Crypto businesses... are subject to authorization from the NRA: Exchange of cryptoassets... Cryptoasset exchange against fiat money... Custodian wallet services..." (Regulated United Europe OÜ, referencing 2025 status) "Crypto is regulated through the Fifth Money Laundering Directive (5MLD)... transposed into Bulgarian national law via Measures Against Money Laundering Act (MAMLA)... MAMLA sets out a single compliance regime for... crypto service providers." (CMS Law)
  • On MiCA Implementation: "Regulation (EU) 2023/1114 on markets in crypto-assets ("MiCA Regulation", "the Regulation") provides the legal framework of crypto-assets... within the EU and in Bulgaria (by virtue of the Regulation's direct effect in EU Member States)... The MiCA Regulation is in force as of 29 June 2023, but its application is postponed until 30 December 2024..." (Deloitte) "At the very end of 2024 the Bulgarian Council of Ministers approved a draft Crypto-Asset Markets Act (CAMA) and introduced it to the Parliament. CAMA shall implement in the national legislation the EU Regulation on Markets in Crypto- Assets (MiCA)... As expected, the Financial Supervision Commission (FSC) will be the national competent authority for... regulating and supervising the activities of crypto-asset service providers..." (Mikov Attorney's) "The EU's Markets in Crypto-Assets (MiCA) regulation, effective December 30, 2024, mandates that all crypto-asset service providers (CASPs) in Bulgaria obtain authorization from the Bulgarian Financial Supervision Commission (FSC) to continue operations." (Scorechain)
  • On Transitional Period: "Crypto-asset service providers registered in the current register under Art. 9a of the Anti-Money Laundering Measures Act at the National Revenue Agency may continue to provide the services registered in the register only on the territory of Bulgaria until 31 December 2025." (Mikov Attorney's, referencing the draft CAMA) "Bulgaria, like other EU member states, has established a 12-month transitional period [ending Dec 30, 2025] during which existing CASPs can operate under current regulations while seeking MiCA authorization." (Scorechain)
  • On Taxation: "In Bulgaria, the taxation of cryptocurrencies is governed by general national tax law principles, as no specific legislation is dedicated to crypto-assets. The Bulgarian National Revenue Agency (NRA) treats cryptocurrencies as financial assets, and income derived from their sale or exchange is subject to taxation." (Borislavova & Ivanov, Jan 2025) "The taxable capital gain from the sale of cryptocurrencies by individual investors is subject to Bulgarian personal income tax at a flat rate of 10%." (Wolf Theiss via Simmons & Simmons)

4. Source URLs:

Disclaimer: This report is based on information available up to April 12, 2025. The regulatory landscape, particularly concerning MiCA implementation, is evolving. Primary legal texts and official communications from the FSC, BNB, and NRA should be consulted for definitive guidance.

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