BULGARIA Trends and Developments Contributed by: George Chisuse, Ivelin Vassilev and Stephany Valcheva, VC Law
may, in regulatory terms, move the platform into a new service category or create additional compliance obli- gations. The licence application should therefore be prepared with the product roadmap in mind, not only the first public version of the platform. If the company expects to add custody, fiat exchange or trading platform functions within a short period, it may be better to address them properly from the start rather than apply for a narrow scope and immediately seek changes. Yet, the roadmap must be credible. A small team applying for the most complex licence scope without the necessary staff, systems and capital may create more questions than confidence. Capital is only the beginning MiCA sets minimum prudential requirements for CASPs depending on the services provided. The com- mon fixed minimums are EUR50,000, EUR125,000 and EUR150,000, depending on the class of services. CASPs must maintain prudential safeguards equal to the higher of the fixed minimum or one quarter of the previous year’s fixed overheads. For new applicants, the practical issue is not only whether they can meet the minimum capital figure. It is whether the financial plan supports the whole oper- ating model. Staff, compliance tools, legal support, technical infrastructure, cybersecurity, insurance, audit, outsourcing, office presence, management time and regulatory reporting all create costs. A weak financial plan can undermine an otherwise good application. The FSC will want to see that the applicant has the resources to operate safely, not merely to incorporate and file documents. Existing providers should use the transition period carefully Existing Bulgarian crypto providers should not treat the transitional period as a waiting room. It is the time to correct and stress-test the business model. Some of the biggest risks are not obvious from the corporate documents. Cross-border marketing may already have created exposure in member states
where the provider cannot rely on local transitional rules. Affiliate or white-label arrangements may blur who is actually providing the regulated service. A custody model that works technically may still fail to show proper segregation of client assets. Even small product changes, such as adding transfers or person- alised prompts, can move the business beyond its intended licence scope. These issues should be iden- tified before filing, because they are much harder to fix once the regulator starts reviewing the application. Transitional status is not the same as a MiCA passport Transitional status should not be confused with a direct passport or with permission to operate in third- country markets. It may allow an existing provider to continue certain activities for a limited period under the Bulgarian MiCA transition, but it does not give the provider the same position as a fully authorised CASP. It also does not help the provider serve mar- kets outside the EU, such as the United Kingdom or Switzerland. This matters for businesses with international ambi- tions. A Bulgarian CASP, or a provider still relying on transitional arrangements, should separately assess each non-EU market it wants to target. The UK is a good example. It is no longer part of the EU passport- ing framework, and crypto firms serving UK consum- ers may need to consider the UK financial promotions regime, FCA registration or authorisation require- ments, and the new crypto-asset regulatory regime as it comes into force. The cross-border planning should be done market by market. A Bulgarian MiCA licence can be valuable for EU passporting, but it should not be presented as a global licence. If the business intends to serve clients in the UK, Switzerland, the UAE or other non-EU juris- dictions, those markets should be mapped separately before marketing begins. Otherwise, the provider may accidentally create regulatory exposure outside the EU while focusing only on the Bulgarian application. Bulgaria can be attractive for licensing Bulgaria may be attractive for crypto businesses for several reasons:
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