Bulgaria Cracks Down on Bitcoin, Bans Accounts of Domestic Exchanges

The Bulgarian government appears to have coordinated with local banks to prevent transitions to foreign exchanges.

The small Eastern European country of Bulgaria is undertaking a crackdown on crypto exchanges. Operations of local websites that are offering customers to buy and sell the digital currency have been crippled.

Bulgarian banks have banned access to the websites and are preventing them from transferring funds to foreign exchanges. The ban has been enacted by banks unilaterally with no explanation given by authorities nor financial institutions.

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First Investment Bank is cited as the one that acted on blocking the accounts of several local exchanges, including crypto.bg, cryptobank.bg and cix.bg.

At present crypto.bg’s forum states that the bank is about to unfreeze its account.

After the accounts of the exchanges were frozen, some of them continued operating with alternative payment systems, however at the time of publication trading on Bulgarian exchanges is suspended.

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Foreign Exchanges Transactions Banned Too

The Bulgarian Bitcoin Association states that the banksappear too have frozen the ability of clients to make transfers to foreign exchanges. In a statement the organisation outlines that there is no legal basis for the actions of the Bulgarian banks.

Bulgaria is a country where a currency board is in place. The transfer of large amounts of funds to other countries need to be reported. The country has been in a currency board since the days of hyperinflation in 1997.

The website of the Bulgarian Central Bank and the local Financial Supervisory Authority are not mentioning Bitcoin transactions in any way, however the country is working on new payment systems legislation.

The new law enters into force from the beginning of 2018 and is introducing higher standards and requirements for banks to monitor transactions. With the introduction of the law, the Central Bank of Bulgaria explains that it expects fewer occurrences when it has to intervene in order to resolve transactions disputes between parties.

The Bulgarian Bitcoin Association said in a statement: “The fight for the survival of the banking system is starting not only in Bangaria, but worldwide. The laws don’t matter, the means won’t matter. There is no way to ban the sale of a bitcoin between people. Exchanges will become decentralized and transactions will be executed peer to peer.”

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