YARD Law Co. · Updated August 2026 · YARD Law Legal Team
Bulgaria's transitional MiCA regime ended on 1 July 2026.
For businesses that previously operated under the Bulgarian registration regime for virtual-asset services, this was a substantive change. Registration under the old regime no longer permits the provision of crypto-asset services.
A business that falls within MiCA must now either be authorised as a crypto-asset service provider, qualify to provide the relevant services under the special regime for certain already-regulated financial entities, or fall within another specific exception provided by the Regulation.
For former Bulgarian registered providers, having a licence application pending on 1 July did not extend the right to continue operating.
This guide explains what changed, what a former provider may still do while unlicensed, who regulates crypto businesses in Bulgaria, the prudential requirements for authorisation and the sanctions that now apply. The application process itself is covered separately in our guide to the crypto licence in Bulgaria and MiCA CASP authorisation.
The Bulgarian transitional regime was established by § 3 of the transitional and final provisions of the Markets in Crypto-Assets Act.
Entities covered by the previous Bulgarian AML registration regime and registered before 30 December 2024 were permitted to continue the activity for which they had been registered, without a MiCA licence, only in Bulgaria.
That right lasted until the earlier of:
The old registration therefore never amounted to a MiCA licence and never provided an EU passport.
A separate provision, § 5(3) of the Act, required KFN to publish the former NRA register after it was transferred to KFN. That is why it is often referred to as the “§ 5(3) register”, but § 5(3) was not the provision that created the transitional right to continue operating.
Since 1 July 2026, the transitional permission has ceased.
Under Article 59 MiCA, crypto-asset services within the EU may generally be provided only by:
The second category matters. A credit institution, investment firm or another financial entity falling within Article 60 does not necessarily need a separate Article 63 CASP authorisation for every crypto service that MiCA permits it to provide.
A pending application did not preserve the transitional right to operate.
KFN expressly instructed firms with pending proceedings at 1 July 2026 that were still conducting business to implement a plan for freezing their activity until a licence was granted or refused.
This follows the structure of § 3(1) itself: the transitional period ended on 1 July 2026 regardless of whether the application had been decided by then.
KFN had previously encouraged businesses seeking to complete authorisation before the transition expired to submit applications by 16 February 2026.
That date was not a statutory deadline for applying for a MiCA licence. It was KFN's practical supervisory cut-off based on its estimate that a complete licensing process was likely to take four to five months.
Applications can still be submitted after 1 July 2026. What has disappeared is the right of a former registered provider to continue its old activity while waiting for the result.
The number has already changed since the transition ended.
At 1 July 2026, KFN had licensed two Bulgarian providers.
On 21 July 2026, KFN granted two further CASP licences to Altcoins BG EOOD and Digital Assist OOD.
Accordingly, as at 16 August 2026, KFN's public register lists four Bulgarian authorised crypto-asset service providers.
The figure should always be checked against KFN's live register because additional applications remain in progress and the number can change quickly.
A much larger number of providers authorised in other EU Member States may also provide services into Bulgaria through MiCA's cross-border notification regime.
The difference is important: a Bulgarian licence is no longer the only lawful route into the Bulgarian market, but the old Bulgarian registration is no longer one of those routes.
It may not continue business as usual.
KFN's post-transition guidance states that a provider without the required authorisation may not provide new crypto-asset services.
Where existing client relationships have to be terminated, however, the provider must assist with an orderly exit and may execute transactions necessary to implement the client's chosen method of termination.
Depending on the circumstances, that may involve:
This should not be treated as permission to continue ordinary commercial activity under the label of “wind-down”.
The transactions must genuinely relate to terminating existing relationships.
Providers that knew they would not be authorised were also expected by KFN to prepare an orderly wind-down plan.
There is a specific rule for custody.
Article 75(9) MiCA provides that where a CASP authorised to provide custody and administration of crypto-assets uses another CASP to perform that custody service, the second provider must itself be authorised under Article 59.
The rule should not be overstated.
MiCA separately permits outsourcing of functions under Article 73 subject to detailed conditions. Article 75(9) is specifically concerned with the use of another crypto-asset service provider for custody and administration.
So the correct proposition is not that every outsourced activity must be performed by another licensed CASP.
It is that custody cannot be passed down the chain to an unauthorised crypto custodian.
The answer depends on the activity and the type of token.
KFN is the principal Bulgarian authority responsible for authorising and supervising CASPs under MiCA.
KFN is also the principal competent authority in Bulgaria for asset-referenced tokens, including authorisation and supervision of issuers under Title III MiCA, subject to the special allocation of powers where the issuer is a credit institution.
For credit institutions, certain prudential supervisory powers remain with BNB.
BNB is the principal Bulgarian authority for issuers of e-money tokens under Title IV MiCA.
An EMT issuer must also have the regulatory status required by MiCA, namely a credit institution or electronic money institution.
This means that saying “KFN regulates crypto services and BNB regulates stablecoins” is too crude.
A project combining a CASP business with token issuance has to be classified first:
Only then can the competent authority and regulatory route be determined.
A business issuing an ART and providing crypto services does not necessarily face two completely separate regulators simply because the token is commonly described as a “stablecoin”.
Article 67 MiCA requires a CASP to maintain prudential safeguards at all times.
The required amount is at least the higher of:
For a business that has not yet operated for a full year, projected fixed overheads for the first 12 months are used instead.
The Annex IV minimums are:
This class covers:
This includes the Class 1 services plus:
This includes the Class 2 services plus:
These figures are frequently described as the “minimum capital for a MiCA licence”, but that is incomplete.
Article 67 calls them prudential safeguards.
They may take the form of qualifying own funds, an appropriate insurance policy or comparable guarantee, or a combination of those mechanisms, subject to the requirements of the Regulation.
The EUR 50,000, EUR 125,000 and EUR 150,000 figures are therefore minimum capital benchmarks within the wider prudential requirement, not the total cost of becoming authorised.
A MiCA application is substantially more than a balance-sheet test.
An applicant must demonstrate, among other things:
KFN's early licensing experience reinforces that point.
In February 2026, KFN reported that of eight applications then submitted, one provider had already been authorised, three applications remained under consideration and four had failed at the completeness stage because significant documentation was missing or communication problems had arisen.
That is not evidence that every future application will be treated the same way. It is evidence that filing a nominal set of documents is not enough.
There are two layers to understand: MiCA itself and the Bulgarian Markets in Crypto-Assets Act.
Article 111 requires Member States to give their competent authorities substantial administrative sanctioning powers.
For infringements of the CASP provisions, including Articles 59, 60, 64 and 65 to 83, MiCA requires powers including:
Article 111 also contains substantially higher sanction levels for market abuse under Articles 88 to 92.
For a business operating in Bulgaria, however, the national sanction provisions also matter.
Articles 37 and 38 ZPKA were amended with effect from 7 August 2026, including conversion of the sanction ranges into euro.
For a legal person infringing the CASP provisions in Articles 59, 60, 64 and 65 to 83 MiCA, Article 37(4) currently provides an administrative pecuniary sanction ranging from:
EUR 12,500 up to the higher of EUR 2,500,000 or 2.5% of annual turnover.
For a repeated infringement, the range becomes:
EUR 25,000 up to the higher of EUR 5,000,000 or 5% of annual turnover.
For natural persons within the corresponding group of infringements, Article 37(1) provides:
EUR 700 to EUR 350,000, or EUR 1,400 to EUR 700,000 for a repeated infringement.
Where the profit gained or loss avoided can be determined, Article 37 contains an additional profit-based sanction mechanism.
Market-abuse infringements under Articles 88 to 92 are subject to a separate and significantly higher regime under Article 38 ZPKA.
The sanction analysis therefore should not be reduced to a single headline number.
The exact exposure depends on:
There is also a point of EU-law interpretation worth noting. Article 111 MiCA sets minimum sanctioning powers that Member States are required to make available, while the current wording of Article 37 ZPKA contains national ceilings that do not reproduce every Article 111 figure in identical form. A business facing an actual enforcement case should therefore not treat a simplified online penalty table as a safe statement of its maximum legal exposure.
Sanctions are also not limited to money. KFN has supervisory powers that can include restrictions on activity, public disclosure, management measures and withdrawal or limitation of authorisation where the relevant statutory conditions are satisfied.
Yes.
An Article 63 CASP authorisation permits the provider to offer its authorised crypto-asset services throughout the EU under the MiCA passport.
The provider submits to its home competent authority:
The home authority then communicates that information to the host Member States, ESMA and EBA.
The CASP may start providing services in the host Member State when it receives confirmation of that communication, or at the latest on the fifteenth calendar day after submitting the required information.
No separate CASP licence is required in every host Member State.
The same mechanism allows a CASP authorised elsewhere in the EU to enter the Bulgarian market.
This is fundamentally different from Bulgaria's former transitional registration, which permitted activity only on Bulgarian territory.
Yes.
The end of the transitional period was not the end of the licensing regime.
A business may still apply for an Article 63 authorisation in Bulgaria. It simply cannot rely on the old registration to operate while the application is pending.
A Bulgarian applicant must also satisfy MiCA's establishment requirements. An authorised CASP must have its registered office in a Member State in which it carries out at least part of its crypto-asset services, its place of effective management must be in the EU, and at least one director must be resident in the EU.
Potentially, but not as a paper exercise.
MiCA gives an authorised CASP an EU passport, so a group with a genuine establishment and operations in another Member State can potentially obtain its authorisation there and subsequently provide services in Bulgaria under Article 65.
But MiCA does not create a free choice of regulator disconnected from the actual business.
The authorised entity must satisfy the establishment and effective-management requirements in its home Member State.
The appropriate licensing jurisdiction therefore depends on the real corporate structure, management, personnel, activities and intended market, not simply on which regulator appears faster.
No. The Bulgarian transitional permission expired on 1 July 2026. A former registered provider cannot continue providing new crypto-asset services merely because it remains visible in the historical register or has a licence application pending.
Not necessarily. The normal route is authorisation under Articles 59 and 63 MiCA, but Article 60 permits certain already-regulated financial entities to provide specified crypto-asset services after completing the applicable notification procedure.
Yes. KFN's guidance allows transactions necessary for an orderly termination of existing client relationships, including transfer to an authorised provider, transfer to the client's own wallet or closing positions. That is a wind-down mechanism, not permission to continue ordinary business.
As at 16 August 2026, KFN's register lists four Bulgarian authorised CASPs. Because licensing proceedings remain ongoing, this number should always be checked against the current KFN register.
KFN is the principal competent authority for CASPs and for asset-referenced token issuers, subject to specific powers retained by BNB where a credit institution is involved. BNB is the principal Bulgarian competent authority for e-money token issuers.
Depending on the services, Annex IV sets permanent minimum capital benchmarks of EUR 50,000, EUR 125,000 or EUR 150,000. Article 67 requires prudential safeguards equal to at least the higher of that benchmark and one quarter of fixed overheads.
Yes. An Article 63 authorisation can be passported into other EU Member States through the Article 65 notification procedure without obtaining a separate CASP authorisation in each host country.
Yes. There is no prohibition on new applications after the transition. The important difference is that an applicant cannot conduct regulated crypto-asset services while waiting for authorisation unless another MiCA basis independently permits those services.
Tell us what services you provide, where your clients are and whether you held a Bulgarian registration. We will set out whether you need an Article 63 authorisation, whether Article 60 or another exception applies, what an orderly wind-down would require if you are unlicensed, and what a realistic application timetable looks like.
This article is for general information only and does not constitute individual legal advice. Prepared by the legal team at YARD Law Co., a law firm based in Sofia, Bulgaria, advising on crypto and blockchain regulation, financial services and commercial law. See also our guides to the Bulgarian MiCA CASP licence, the MiCA Regulation and crypto tax in Bulgaria.
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