Cryptoassets and the Law: What Changed in 2026 and What It Means for You

Petkov Legal Law Office | 13 August 2026 | Financial Regulation, Tax Law

On 1 July 2026, the transitional period under the European Markets in Crypto-Assets Regulation (MiCA) came to an end. From that date, no one may legally provide crypto-asset services to clients in the European Union without a licence. For Bulgaria, the change has been significant: of the more than 180 companies registered under the previous simplified regime, only a handful are currently licensed.

If you operate a crypto-asset business or simply hold a crypto portfolio, the next few minutes of reading could save you considerably more time — and expense — later on.

What MiCA Requires

Regulation (EU) 2023/1114 applies directly in Bulgaria, without the need for transposition into national law. It divides crypto-assets into three categories: asset-referenced tokens; e-money tokens; and all other crypto-assets — including Bitcoin, Ether and so-called utility tokens.

Crypto-assets that qualify as financial instruments under MiFID II fall outside the scope of the Regulation, as do unique and non-fungible tokens (NFTs). Determining the correct classification is the first assessment that should be made for any project — and one of the most frequently underestimated.

For businesses, the key point is that MiCA defines ten crypto-asset services, each requiring authorisation: custody and administration, operation of a trading platform, exchange for funds, exchange for other crypto-assets, execution of orders, placing of crypto-assets, reception and transmission of orders, advice, portfolio management, and transfer services.

The licence serves as a European passport — once granted, it allows the provider to operate throughout the Union. In return, businesses must meet substantial requirements:

Bulgarian Law and the Role of the FSC

The Bulgarian Markets in Crypto-Assets Act (promulgated in State Gazette No. 54 of 4 July 2025, effective from 8 July 2025) does not replicate MiCA. Instead, it regulates the national aspects of the framework: competent authorities, procedures and sanctions.

The Financial Supervision Commission (FSC) licenses and supervises crypto-asset service providers and issuers of asset-referenced tokens. The Bulgarian National Bank (BNB) is responsible for issuers of e-money tokens. The FSC has extensive enforcement powers — including the blocking of websites and deletion of domain names — while financial penalties for serious infringements can reach millions of euros and a percentage of annual turnover.

Practice to date shows that the threshold is high. Of the first eight companies to submit applications, four were rejected at the completeness-check stage alone — some were missing between 60% and 70% of the required documentation. The regulator places explicit emphasis on genuine presence and actual business activity in Bulgaria, rather than mere formal registration.

Taxes: What You Owe and When

For individuals, the applicable provision is Article 33(3) of the Bulgarian Personal Income Tax Act, which, since 1 January 2024, expressly includes virtual currencies among financial assets. The mechanism works as follows: realised gains for the year are aggregated, realised losses are deducted, the resulting amount is reduced by a statutory 10% expense allowance, and the remainder is taxed at a rate of 10%. The effective tax burden is therefore 9%.

The income must be reported in Appendix No. 5 to the annual tax return by 30 April, with a 5% discount available when filing electronically by 31 March. No advance tax is due.

Three situations tend to cause the most problems in practice:

• Crypto-to-crypto exchanges are taxable events. You do not need to receive fiat currency for a tax liability to arise.
• Activities carried out “by way of business” are taxed differently. In cases of systematic trading or mining, the individual is treated as a trader — the tax rate rises to 15% and social security obligations arise. The classification does not depend on how you describe your own activity.
• The burden of proving the source of funds rests with you. In the absence of adequate documentation, the revenue authorities may apply the special assessment procedure under the Tax and Social Security Procedure Code. Platform statements and evidence of acquisition cost should be retained for five years.

A major change in transparency is also approaching. With the implementation of Directive (EU) 2023/2226 (DAC8), licensed providers will report information about their clients and transactions to the Bulgarian National Revenue Agency (NRA), with that information being subject to automatic exchange between Member States. The era of self-reporting without corresponding third-party information is coming to an end.

What the Case Law Says

The judgment of the Court of Justice of the European Union in Case C-264/14 (Hedqvist) of 22 October 2015 remains fundamental: the exchange of traditional currency for Bitcoin and vice versa constitutes a supply of services for consideration, but is exempt from VAT, as the virtual currency functions as a contractual means of payment.

The limits of that exemption have now been clarified. In its judgment in Case C-472/24 of 5 March 2026, the Court held that an in-game virtual currency does not benefit from the exemption because it can only be used within the closed ecosystem of the particular game. The practical conclusion is that not every “virtual currency” is exempt — the test is whether the asset is accepted as a general means of payment outside its own platform.

Bulgarian case law concerning crypto-assets remains limited. Most cases involve tax disputes arising from tax assessment acts before the administrative courts, where the central issue is rarely the applicable tax rate and almost always the ability to prove the source of funds and acquisition cost. On key questions of private law — security interests over crypto-assets, enforcement against self-custodied assets, and liability in the event of a hacking attack — there is still no established body of case law.

This gap has a clear practical consequence: the outcome of a dispute can be difficult to predict, making advance contractual planning disproportionately more valuable than subsequent litigation.

What Comes Next

The framework is not final. The European Commission is already reviewing MiCA, with discussions covering centralised supervision by ESMA, changes to the stablecoin regime, and an extension of the framework to DeFi, staking and NFTs. Separately, from 10 July 2027, the new anti-money laundering package will apply, prohibiting anonymous crypto-asset accounts and services involving crypto-assets with built-in anonymity features.

In other words, companies that are only now bringing their operations into compliance should plan for a framework that is likely to change again within the next two to three years.