BULGARIA Law and Practice Contributed by: George Chisuse, Ivelin Vassilev, Stephany Valcheva and Daniel Kolev, VC Law
fore informal and association-based rather than regu- latory. The most relevant bodies are fintech and tech- nology associations, including the Bulgarian Fintech Association and other business organisations that engage with regulators and policymakers on digital finance, innovation and financial-sector regulation. These bodies do not license market participants and their standards are not legally binding. Their role is to help organise industry feedback, participate in con- sultations, raise implementation issues with public authorities and support dialogue between the private sector and regulators. This proves useful now that MiCA is being implemented in Bulgaria and market participants are trying to understand the expectations of the FSC and, where payment or e-money matters are involved, the Bulgarian National Bank. 1.2 Crypto-Assets 1.2.1 Property Considerations In most EU member states, including Bulgaria, crypto- assets are not expressly regulated as a separate cate- gory of property under general civil law. However, they can be treated as intangible assets with economic value, and ownership claims would normally be ana- lysed by analogy with other incorporeal rights or non- physical assets. This is different from tangible prop- erty, where possession, location and physical control are easier to establish and where the legal rules on ownership and enforcement are more developed. The difficulty is how a claimant proves control, owner- ship and entitlement to it. If the crypto-assets are held with a centralised exchange or custodian, enforce- ment is more realistic because the intermediary can be identified and served with a freezing order or oth- er enforcement measure. If the assets are held in a self-custody wallet, enforcement is much more dif- ficult. The claimant would need to identify the person behind the wallet, prove the link between that person and the relevant address, and then secure access to the private keys or obtain co-operation through legal process. Blockchain analysis may help, but it will not always be enough on its own. The transfer of ownership is not governed by a specif- ic statutory rule under Bulgarian law. In ordinary trans- actions, the most practical point of reference is the
moment when the blockchain transaction becomes final and the transferee obtains effective control over the asset. That said, on-chain finality should not be treated as a complete answer in every case. In dis- putes involving fraud, mistake, insolvency or com- peting claims, the analysis may also depend on the underlying contractual arrangements and general principles of Bulgarian civil and commercial law. Collateral arrangements over crypto-assets are pos- sible in practice, but they raise legal and regulatory uncertainty. Where the relevant crypto-asset qualifies as a financial instrument, the existing framework for financial collateral may be relevant. For most crypto- assets, there is no dedicated regime dealing with the creation and enforcement of security interests over such assets. As a result, parties need to structure the arrangement carefully, usually by relying on con- tractual control mechanisms, custody arrangements, pledges over related receivables or rights, or other bespoke security structures. The legal risk is insolvency effectiveness. A secured party should not assume that collateral over crypto- assets will be treated in the same way as collateral over cash, securities or tangible assets. The enforce- ability of the arrangement will depend on how con- trol is achieved, who holds the assets, the role of any exchange or custodian and how Bulgarian insolvency and enforcement rules would apply in the particular case. 1.2.2 Access to Banking There are no restrictions preventing CASPs from using ordinary banks, payment institutions or elec- tronic money institutions for general banking and pay- ment services. The relevant partner must be properly authorised for the services it provides and must com- ply with its own AML/CFT, sanctions, payment ser- vices and operational resilience obligations. The issue is whether the bank or payment institution is willing to onboard and maintain the relationship. Crypto-related businesses are often treated as higher- risk customers across the EU, including Bulgaria. This does not mean that banking access is unavailable, but it does mean that the onboarding process is likely to involve enhanced due diligence and a closer review
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