Bulgarian Financial Watchdog to Monitor Crypto Market

Bulgaria's Financial Supervision Commission (FSC) will start monitoring the crypto market in an effort to devise measures against money laundering and fraud via virtual currencies.

Bulgaria's Financial Supervision Commission (FSC) will start monitoring and analyzing the cryptocurrency market and Initial Coin Offerings (ICOs) launched in the country in an effort to come up with measures against money laundering and fraud via virtual currencies, the regulator has revealed.

According to the FSC’s “Financial Technology Monitoring Strategy in The Non-Banking Financial Sector (2018 - 2020)”, published on its website last week, the commission will focus on four main areas of action:

  • setting requirements for possible licensing or registration of companies offering financially innovative products and/or services and technologies in the non-banking financial sector;
  • an analysis of the need for a regulatory framework in relation to outsourcing services, including cloud services;
  • the creation of Innovation hubs;
  • cyber-security risk management.

“The challenge for the non-banking financial sector is to balance the benefits of the introduction of cutting-edge technology and preserve financial stability and safety for consumers and investors in the sector,” the FSC strategy reads.

According to data from the European Securities and Markets Authority (ESMA), investments in the fintech sector in the first nine months of 2016 worldwide reached USD 19 billion — a fivefold rise compared to 2013’s figures.

Against this backdrop of fast sector development, Bulgarian regulators lag behind in establishing rules and preventing crypto-related crime. As reported by Cryptovest last week, the Bulgarian government ranks as the second richest Bitcoin (BTC) owner in the world following police operations seizing possessions of alleged criminals.

A crackdown on organized crime by the Bulgarian law enforcement in May 2017 resulted in the seizure of a stash of 213,519 Bitcoins, enough to pay off about a quarter of the country’s national debt. According to Bulgarian authorities, the criminals used their technical prowess to circumvent taxes. As of June 2018, the virtual coins would be worth more than $1.2 billion.