BULGARIA Law and Practice Contributed by: George Chisuse, Ivelin Vassilev, Stephany Valcheva and Daniel Kolev, VC Law
4. Cross-Border Services 4.1 Marketing
In practical terms, buyers of licensed CASPs should treat regulatory approval as a core transaction work- stream. Due diligence should cover the target’s cor- porate, tax and financial position, and also its licence scope, client asset arrangements, AML framework, governance, outsourcing and any conditions attached to the authorisation. A share purchase agreement should also include appropriate conditions precedent for regulatory notification or non-objection, co-oper- ation obligations and termination rights if the acquisi- A CASP licence obtained in Bulgaria can be pass- ported into other EU member states under MiCA. This means that a Bulgarian-authorised CASP can provide its authorised crypto-asset services across the EU without applying for a separate licence in each host member state. tion is not cleared. 3.4 Passporting To benefit from the passport, the CASP must submit a cross-border notification to the FSC, identifying the member states where it intends to operate, the ser- vices it will provide, the intended start date and any other activities it carries out. The FSC then notifies the relevant host authorities, ESMA and EBA. The CASP can start providing services once it is informed that the notification has been communicated, or at the lat- est after the MiCA waiting period has expired. The passport only covers the services for which the CASP is authorised. This is a useful point for applicants to consider at the licensing stage. A firm that wants to use Bulgaria as an EU entry point should ensure that its licence scope matches its wider EU business plan, rather than applying for a narrow licence and later discovering that its passport does not cover the services it wants to provide in other member states. Passporting also does not eliminate every local-law issue. Host-country tax, consumer protection, adver- tising, AML implementation, data protection and civil- law rules may still affect how the service is offered. In addition, firms relying only on transitional arrange- ments are not in the same position as fully authorised CASPs and should not assume that they benefit from the MiCA passport before full authorisation is granted.
Regulated crypto-asset services may not be provided to clients in Bulgaria unless the provider is properly authorised under MiCA or is otherwise entitled to pro- vide the service under the MiCA passporting regime. An EU-authorised CASP may service Bulgarian cli- ents without obtaining a separate Bulgarian licence, but only after completing the required cross-border notification through its home regulator. The passport only covers the crypto-asset services included in the CASP’s authorisation, so a provider cannot use a nar- row licence obtained in one member state to offer broader services in Bulgaria. A non-EU provider cannot actively target Bulgarian or EU clients without considering MiCA authorisation. Reverse solicitation is permitted, but it is interpreted narrowly. It applies only where the client approaches the provider on the client’s own exclusive initiative. It should not be relied on where the provider uses Bulgarian or EU-focused advertising, local affiliates, influencer campaigns, targeted online marketing, cli- ent onboarding adapted to Bulgarian users, promo- tional events or educational materials that effectively direct clients to its services. Where crypto-assets are offered to the public or admitted to trading in Bulgaria, MiCA White Paper and marketing rules may apply. Marketing communi- cations must be fair, clear and not misleading, must be consistent with the White Paper, and generally cannot be disseminated before the relevant White Paper has been published. For ARTs and EMTs, the disclosure and approval requirements are stricter. Bulgaria does not have a separate crypto-specific advertising code comparable to the UK financial pro- motion regime. However, marketing is still subject to MiCA, and the local consumer protection rules and general advertising standards. Firms should avoid exaggerated statements, unclear risk disclosures, “guaranteed return” language, or any suggestion that a product is risk-free simply because the provider is licensed.
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