BULGARIA Trends and Developments Contributed by: George Chisuse, Ivelin Vassilev and Stephany Valcheva, VC Law
vendor or because the client interacts with a block- chain address. That is not always enough. The real question is who controls the means of access and who can move the assets. If the platform can initiate or approve transfers, recover access, restrict withdraw- als or otherwise control assets, the regulatory analysis may still point towards custody or administration. For an exchange, vague custody explanations are dangerous. The regulator, banks and clients will all want to know where the assets are and who can move them. Banking and payment arrangements are part of the licensing story A crypto exchange also needs a reliable route in and out of fiat. Clients may be trading crypto-assets, but the business often still depends on banks or e-money institutions to process deposits, withdrawals and set- tlements. If that payment layer is unclear or fragile, the whole operating model becomes harder to explain to the regulator, banks and clients. There is no general rule preventing CASPs from using banks, but the real challenge is the access. Crypto businesses are usually treated as higher-risk clients and should expect enhanced due diligence. Banks will review the ownership structure, regulatory status, source of funds, AML controls, Travel Rule arrange- ments, custody model and client protection measures. The fiat flow should be clear enough that the regula- tor can follow the money without needing to recon- struct the model from different documents. It should be obvious where client funds enter the structure, who holds them, how client balances are recorded, and what happens when a deposit, withdrawal or refund fails. Where a payment institution, bank or e-money institution is involved, its role should be explained with precision. This is also where the applicant should test whether the payment layer creates any separate pay- ment services or e-money issues. These questions should be answered early. A CASP application that assumes banking access without hav- ing a realistic banking plan may look incomplete. Even if the regulator does not require a final banking con-
tract at the earliest stage, the applicant should show that it understands how the payment layer will work. Marketing is no longer separate from compliance Marketing for a crypto exchange is now a regulatory issue. MiCA expects communications to be fair, clear and not misleading. That affects how the service is presented on the website, in social media, through influencers, in referral campaigns and in educational content. The most obvious problems are promises of guar- anteed returns, suggestions that crypto is risk-free, exaggerated claims about security, unclear fee descriptions and marketing that gives the impression of regulatory approval where only authorisation for specific services exists. A more subtle problem is the line between education and advice. A general article explaining how crypto trading works is different from personalised guidance to a client on which crypto-asset to buy, sell or hold. If the platform uses profiling, risk scoring, automated prompts or personalised recommendations, the busi- ness should check whether it is moving into advice or portfolio management. Influencer marketing also needs care. If a campaign looks like a personal success story but is actually paid promotion, the risk increases. The platform should control the script, disclosures and claims. It should also keep evidence of how marketing materials were reviewed and approved. Marketing should be included in the compliance framework before launch, not cleaned up after the first complaint. The licence file should match the product roadmap One of the most practical pieces of advice for found- ers is this: do not prepare the licence application only around the current version of the product. A crypto exchange rarely stays static. New assets, cli- ent segments, payment routes or trading features can quickly change the regulatory profile of the business. A feature that looks like a small product improvement
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