Bulgaria

Retail_Trading_Status

Allowed-Regulated High Confidence

Analysis ID: #617
Version: Latest
Created: 2025-12-12 03:56
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Workflow Stage: Step 1

Executive Summary

Retail cryptocurrency trading is fully legal and regulated in Bulgaria. As of July 2025, the country has implemented the EU's Markets in Crypto-Assets (MiCA) regulation through the local 'Markets in Crypto-Assets Act', designating the Financial Supervision Commission (FSC) as the primary regulator for crypto-asset service providers (CASPs). While a legacy registration regime with the National Revenue Agency (NRA) remains valid for grandfathered entities until July 2026, new market entrants must obtain a license from the FSC. Capital gains from crypto trading are subject to a flat 10% personal income tax.

Detailed Explanation

Retail cryptocurrency trading is fully legal and regulated in Bulgaria. The regulatory landscape has been solidified with the implementation of the European Union's Markets in Crypto-Assets (MiCA) framework. The primary legislation is the local 'Markets in Crypto-Assets Act', which was promulgated in the State Gazette on July 4, 2025, and enacted on July 8, 2025. This act designates the Financial Supervision Commission (FSC) as the primary licensing and supervisory authority for crypto-asset service providers (CASPs), while the Bulgarian National Bank (BNB) supervises issuers of electronic money tokens (EMTs). As of July 2025, new market entrants must obtain a license from the FSC to operate legally. However, a grandfathering clause allows entities that were registered with the National Revenue Agency (NRA) for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) compliance before December 30, 2024, to continue operating without a MiCA license until July 1, 2026, or until a licensing decision is made on their application, providing a transition period from the old regime to the new MiCA-based system. The legacy AML framework is governed by the Law on Measures Against Money Laundering (MAMLA), enacted on March 27, 2018, which transposed EU AMLD5 and requires relevant crypto service providers to register with the NRA and implement strict customer due diligence (KYC) and suspicious transaction reporting. From a taxation perspective, capital gains from cryptocurrency trading are treated as income from the sale of financial assets under the Personal Income Tax Act (Article 33, paragraph 3) and are subject to a flat 10% personal income tax for individuals; losses can be offset against gains within the same fiscal year but cannot be carried forward. The exchange of cryptocurrency for fiat currency is exempt from Value Added Tax (VAT) in alignment with EU case law, but the purchase of goods or services using crypto remains subject to standard VAT. For cryptocurrency mining, income from systematic activities conducted with specialized hardware may be treated as professional activity for a sole trader and taxed at a 15% rate. The regulatory path has moved away from the enforcement uncertainty highlighted by the 'Nexo raid' in early 2023 toward a structured supervisory model with clear licensing procedures and sanction regimes as established by the Markets in Crypto-Assets Act.

Summary Points

I. Regulatory Status
* Retail cryptocurrency trading is fully legal and regulated.
* Status: Allowed-Regulated.
* The EU's MiCA regulation is implemented nationally via the Markets in Crypto-Assets Act (effective July 2025).

II. Key Regulatory Bodies
* Financial Supervision Commission (FSC): Primary licensing and supervisory authority for Crypto-Asset Service Providers (CASPs).
* Bulgarian National Bank (BNB): Supervises issuers of electronic money tokens (EMTs).
* National Revenue Agency (NRA): Maintains a legacy registration regime for AML/CFT compliance, valid for grandfathered entities until July 2026.

III. Important Legislation
* Markets in Crypto-Assets Act: Promulgated July 4, 2025; enacted July 8, 2025. This is the primary legislation implementing EU MiCA, designating competent authorities (FSC, BNB), establishing licensing procedures, and setting sanction regimes.
* Law on Measures Against Money Laundering (MAMLA): Enacted March 27, 2018. Transposed EU AMLD5, requiring registration with the NRA and implementation of KYC and suspicious transaction reporting.
* Personal Income Tax Act (Art. 33, para. 3): Governs individual taxation, treating crypto gains as income from the sale of financial assets.

IV. Compliance Requirements
* Licensing: New market entrants must obtain a license from the FSC under the Markets in Crypto-Assets Act.
* AML/KYC: Strict compliance required under MAMLA.
* Taxation (Individuals): A flat 10% tax applies to capital gains from crypto trading. Losses can be offset against gains within the same fiscal year but cannot be carried forward.
* VAT: Exchange of crypto for fiat is exempt from VAT. Goods/services purchased with crypto are subject to standard VAT.
* Mining: Income from systematic mining with specialized hardware may be treated as professional activity (sole trader) and taxed at 15%.

V. Notable Restrictions or Limitations
* Grandfathering Clause: Entities registered with the NRA before December 30, 2024, can operate without a MiCA license only until July 1, 2026, or until a license decision is made.

VI. Recent Developments or Notes
* The 'Nexo raid' in early 2023 caused temporary market anxiety.
* Subsequent legislative developments in 2024 and 2025 have solidified a clear regulatory path, moving the country away from enforcement-by-raid toward structured supervision.

Full Analysis Report

As of late 2025, Bulgaria has transitioned from a basic AML-registration framework to a comprehensive licensing regime aligned with the European Union's Markets in Crypto-Assets (MiCA) regulation. The pivotal shift occurred with the enactment of the 'Markets in Crypto-Assets Act' in July 2025, which formally designated the Financial Supervision Commission (FSC) as the competent authority for licensing and supervising Crypto-Asset Service Providers (CASPs). This move ended the previous 'gray' period where the National Revenue Agency (NRA) maintained a simple registry solely for anti-money laundering purposes.

Under the new framework, retail trading is explicitly permitted and protected by consumer safeguard requirements mandated by MiCA. New businesses entering the market must obtain a full license from the FSC, demonstrating sufficient capital, governance structures, and IT resilience. However, a significant transitional ('grandfathering') provision allows entities that were already registered with the NRA before December 30, 2024, to continue operations under the old regime until July 1, 2026. This creates a temporary dual-track system where some entities operate under FSC licenses while legacy players operate under NRA registration.

Taxation remains a critical consideration for retail investors. The National Revenue Agency treats cryptocurrency as a financial asset. Gains from the sale or exchange of crypto assets are subject to a flat 10% personal income tax. Investors must declare these gains in their annual tax returns (Form 200) by April 30 of the following year. Notably, if trading activity is deemed 'professional' or 'commercial' (e.g., high-frequency trading or industrial-scale mining), the income may be taxed as sole trader income at a rate of 15%.

Enforcement has tightened significantly. The FSC has been granted powers to block websites, restrict social media accounts, and impose heavy fines (up to EUR 15 million or 15% of turnover) for non-compliance. The Bulgarian National Bank (BNB) retains oversight over 'electronic money tokens' (stablecoins), ensuring they meet strict reserve and issuance standards. This division of labor ensures comprehensive coverage of the crypto market, providing a stable and legally certain environment for retail participants.

As of late 2025, Bulgaria has transitioned from a basic AML-registration framework to a comprehensive licensing regime aligned with the European Union's Markets in Crypto-Assets (MiCA) regulation. The pivotal shift occurred with the enactment of the 'Markets in Crypto-Assets Act' in July 2025, which formally designated the Financial Supervision Commission (FSC) as the competent authority for licensing and supervising Crypto-Asset Service Providers (CASPs). This move ended the previous 'gray' period where the National Revenue Agency (NRA) maintained a simple registry solely for anti-money laundering purposes.

Under the new framework, retail trading is explicitly permitted and protected by consumer safeguard requirements mandated by MiCA. New businesses entering the market must obtain a full license from the FSC, demonstrating sufficient capital, governance structures, and IT resilience. However, a significant transitional ('grandfathering') provision allows entities that were already registered with the NRA before December 30, 2024, to continue operations under the old regime until July 1, 2026. This creates a temporary dual-track system where some entities operate under FSC licenses while legacy players operate under NRA registration.

Taxation remains a critical consideration for retail investors. The National Revenue Agency treats cryptocurrency as a financial asset. Gains from the sale or exchange of crypto assets are subject to a flat 10% personal income tax. Investors must declare these gains in their annual tax returns (Form 200) by April 30 of the following year. Notably, if trading activity is deemed 'professional' or 'commercial' (e.g., high-frequency trading or industrial-scale mining), the income may be taxed as sole trader income at a rate of 15%.

Enforcement has tightened significantly. The FSC has been granted powers to block websites, restrict social media accounts, and impose heavy fines (up to EUR 15 million or 15% of turnover) for non-compliance. The Bulgarian National Bank (BNB) retains oversight over 'electronic money tokens' (stablecoins), ensuring they meet strict reserve and issuance standards. This division of labor ensures comprehensive coverage of the crypto market, providing a stable and legally certain environment for retail participants.

Source Evidence

Primary and secondary sources cited in this analysis

Markets in Crypto-Assets (MiCA) licensing in Bulgaria primary (analysis)

2025-06-26

"The Financial Supervision Commission (“FSC“) is the default competent authority for MiCA in Bulgaria. It licences and monitors asset-referenced-token issuers and CASPs."

Bulgaria adopts Markets in Crypto-Assets Act aligning with MiCA primary (analysis)

2025-07-01

"On 20 June 2025, the Bulgarian parliament adopted the Markets in Crypto-Assets Act... The act will enter into force three days after its promulgation in the State Gazette."

National Revenue Agency - Crypto Taxation Guidelines primary (official_government)

2025-01-07

"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%."

Implementation of the EU Markets in Crypto-Assets Regulation in Bulgaria secondary (analysis)

2025-07-11

"According to the Act, virtual-asset service providers that were recorded in the Bulgarian National Revenue Agency AML register before 30 December 2024, may pursue in Bulgaria the activity... until 1 July 2026."