BULGARIA Law and Practice Contributed by: George Chisuse, Ivelin Vassilev, Stephany Valcheva and Daniel Kolev, VC Law
Vassilev and Chisuse Law Firm 256A build., Mladost 2 District Sofia Bulgaria 1799
Tel: +359 89 913 7682 Email: office@vclaw.eu Web: www.vclaw.eu
1. Overview of Blockchain and Crypto- Assets 1.1 Blockchain 1.1.1 Evolution of Uses of Blockchain Blockchain adoption in Bulgaria is still more cautious than in larger EU financial centres, but the direction is clear. Both businesses and institutions are now look- ing more seriously at tokenisation, custody, payment- related models and compliance. The most developed financial use case is tokenisa- tion, as market participants are testing tokenised bonds, fund interests and other financial instruments, supported by the EU DLT Pilot Regime, established by Regulation (EU) 2022/858. In Bulgaria, the market is still at an earlier stage, but interest is growing, par- ticularly from businesses that see MiCA as a way to structure crypto-asset services in a more credible and passportable form. One of the main issues for the Bulgarian market is whether businesses can justify using blockchain in a way that is commercially convincing. Many projects sound attractive in theory, especially around tokeni- sation, traceability and digital proof of ownership, but they still need to show why blockchain is better than an ordinary database, contract or registry. Over the next period, the strongest projects are likely to be those that solve a specific operational problem, rather than those that use blockchain mainly as a branding feature. Outside financial services, blockchain is being consid- ered for traceability and digital proof of authenticity.
These projects are usually easier to structure because they do not always involve regulated crypto-assets. They still need to deal with data protection, consumer protection, contract law and sector-specific rules. Existing intellectual property rules can accommodate blockchain projects, but only if the documentation clearly explains what the token holder receives and what rights remain with the issuer. Smart contract code can be protected as software, and proprietary know-how may be protected through trade secrets and contracts. The more common problem is misun- derstanding what a token gives to its holder. Owning a token or NFT does not automatically mean owning the copyright, trade mark or other IP rights linked to the underlying asset. Those rights must be transferred or licensed expressly. The bigger legal friction point is often data protection. Blockchain records are difficult to amend or delete, while the GDPR gives individuals rights such as recti- fication and erasure. For that reason, projects should avoid placing personal data directly on-chain. A safer structure is to keep sensitive data off-chain and use on-chain hashes, timestamps or references, although even these elements should be assessed where they can be linked to an identifiable person. 1.1.2 Regulatory Sandbox Bulgaria does not currently have a dedicated regu- latory sandbox for blockchain or crypto-asset pro- jects. The Financial Supervision Commission (FSC) has provided guidance and communication channels for market participants, but this is not the same as a
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