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Bulgaria’s Crypto Crackdown: Understanding AML/KYC Regulations
In a bid to combat money laundering and terrorism financing, Bulgaria has strengthened its anti-money laundering (AML) and know-your-customer (KYC) regulations for cryptocurrency transactions. The country’s financial authorities have introduced strict requirements for cryptocurrency exchanges, brokers, and traders to ensure transparency and security in the digital asset market.
Accounting and Reporting
Bulgaria’s accounting and reporting laws are aligned with EU directives and regulations. According to the Accountancy Act of 2015 and the Independent Financial Audit Act of 2016, companies must report their financial statements annually, including cryptoassets. Small companies exceeding certain parameters must also undergo statutory audit.
Removal from Public Registry
The National Revenue Agency (NRA) may remove a crypto authorization entry from the Public Registry due to various reasons, including:
- Incomplete or misleading information
- Violation of AML/CFT laws
- Termination of cryptocurrency-related services
Obtaining a Crypto License in Bulgaria
To operate a cryptocurrency business in Bulgaria, companies must obtain a license from the Bulgarian Financial Supervision Commission (FSC). The country offers various types of crypto licenses, including:
- Exchange license
- Broker license
- Trading license
- VASP (Virtual Asset Service Provider) license
Applicants must provide comprehensive documentation, including:
- Business plans
- Proof of AML/KYC compliance
- Cybersecurity measures
Benefits and Challenges
Securing a crypto license in Bulgaria enhances credibility and provides access to the European market under a regulated framework. However, navigating the regulatory environment can be challenging due to frequent updates and modifications in laws governing digital currencies.
Investment Opportunities
Bulgaria’s crypto market offers significant investment opportunities, characterized by:
- A favorable tax regime
- Supportive ecosystem for technological innovation
The potential for substantial growth makes Bulgaria an appealing choice for crypto-related ventures.
Purchasing an Existing Crypto License
For those seeking a quicker entry into the market, purchasing an existing crypto exchange license in Bulgaria may be an option. However, thorough due diligence is required to ensure the license meets all regulatory requirements and aligns with the buyer’s business goals.
By understanding AML/KYC regulations and obtaining a crypto license in Bulgaria, companies can capitalize on the opportunities presented by the country’s progressive approach to cryptocurrency regulation.