How to read this article today
The assertion that regulation is generally absent must be read in its historical context. The MiCA Regulation applies according to the timetable in Article 149, and the transitional regime for service providers under Article 143 ended, at the latest, on 1 July 2026. The type of crypto-asset, service and entity must be distinguished, and applicable authorisations and obligations verified. The tax rates and reports of alleged seizures in the original are not confirmed by this review and must not be treated as current information.
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Bitcoin in Bulgaria
If you are unfamiliar with Bitcoin (BTC) and other cryptocurrencies, or are familiar with Bulgaria, you may be surprised that cryptocurrency mining is popular in the country. Cryptocurrencies are a virtual form of currency operating on a system of trust and decentralisation, using an underlying technology called blockchain. Cybercurrency and the Bulgarian authorities. When it comes to cybercurrencies, the Bulgarian authorities are not welcoming. They do not regulate them because they do not recognise these currencies as legal tender. This also means that people who create cybercurrencies do not require a licence to issue them, unless they trade financial instruments whose underlying assets are cryptocurrencies. Taxation. The fact that the authorities do not really look favourably on cryptocurrencies does not mean that they have excluded them altogether. Although Bitcoin mining is not regulated, for example, people who mine this cryptocurrency (and others) must pay a 10% tax on all profits made from Bitcoin. This may arise from cryptocurrency-to-fiat-currency transactions (currency backed by the state) or cryptocurrency-to-cryptocurrency transactions. Companies trading professionally in cryptocurrency must pay the corporate tax rate, which is 15%. As regards VAT, any mining activity is taxable if there is a direct link between the service and the remuneration. There is, however, debate over whether cryptocurrency transactions should be subject to VAT. The European Court of Justice's ruling establishes that transactions carried out with coins, banknotes or currencies that are not legal tender are exempt from VAT.
Cryptocurrencies, banks and crackdowns.
It appears that the Bulgarian authorities are not alone in failing to warm to cryptocurrencies. In 2017, the country's leading banks blocked the accounts of major cryptocurrency exchanges. Notable banks included First Investment Bank (Fibank) and United Bulgarian Bank. JP Morgan Chase and Commerzbank, which work with Fibank, also refused to accept transactions involving the sale of cryptocurrencies.
In the same year, law enforcement agencies became involved and reports emerged that the authorities had seized bitcoins. They are believed to have seized more than 213,000 bitcoins in a series of raids. The Specialised Prosecutor's Office had announced an operation against a large-scale criminal group. The hackers had gained remote access to the Customs Agency's IT systems by introducing malware into the agency's computer systems.
Whether the authorities actually seized all the bitcoins is disputed. The head of the Specialised Prosecutor's Office denied that the prosecution service and the Bulgarian Ministry of Interior had seized cryptocurrency during the raids. There are various rumours about what happened to the bitcoins. Some believe that Bulgaria accumulated so much virtual currency that its Bitcoin reserves exceed its gold reserves. Rumours that the Ministry of Interior used the cryptocurrency to finance a new air squadron were quickly dismissed, leading some to believe that the Ministry may still hold the bitcoins.
These are curious times for cryptocurrency in Bulgaria: the government does not accept virtual currency as legal tender but recognises some of the potential of cryptocurrency mining and transactions to generate revenue for the country. Although the underlying purpose of creating cryptocurrencies is positive, the authorities and financial sector remain wary of how those operating outside the law may exploit cryptocurrency for illegal purposes.