Category Archives: Bulgaria

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Bulgaria to Monitor Crypto Market with Focus on Regulatory Steps

Bulgaria has announced that it is to begin monitoring cryptocurrency and ICO activities in the country through its government watchdog, according to Cryptovest. The focus of Bulgaria’s Financial Supervision Commission (FSC) will be securing a safeguard against illegal activity such as money laundering and fraud connected with cryptocurrency.

As reported in Bitcoin News over the past few days, Bulgaria seized a massive BTC 213,519 in May currently worth around USD 1.4 billion, making the country a substantial holder of the currency. The total would reportedly be enough to pay off a quarter of Bulgaria’s national debt.

The commission sees eliminating such crime as crucial to the regulation of the industry. Four main areas have been targeted of which one is aimed at criminal activity. The others are largely designed to encourage cryptocurrency regulation.

The areas fall mainly into setting clear licensing and registration conditions for products and services, coming up with a regulatory process for outsourcing services, creating innovation hubs and finally dealing with cybersecurity concerns. The FSC ‘Financial Technology Monitoring Strategy in The Non-Banking Financial Sector’ document confirms and summarizes these four main areas of attention in the following statement:

“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.”

Bulgaria has a had a history of banks blacklisting the IBANs of major exchanges such as Coinbase and Kraken. The new moves could at least add some clarification to the space and may go some way to appeasing the banks, perhaps softening their stance on dealing with exchanges, if current AML laws are addressed.

If, as suggested, the giant haul of Bitcoins seized by the authorities was the result of tax fraud, it appears that new cryptocurrency tax legislation would be fairly high on Bulgaria’s regulatory agenda moving forward.

 

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Bulgaria’s Bitcoin Stash Size Second Only to Satoshi Nakamoto’s

In May 2017, Bulgarian law enforcement seized BTC 213,519 during a crackdown on an organized crime ring that was circumventing taxes. These Bitcoins are worth USD 1.4 billion as of this writing on 10 July 2018. If the Bulgarian government is still holding onto these Bitcoins then it has the second largest stash of Bitcoins in the world, only surpassed by Bitcoin’s founder Satoshi Nakamoto.

However, the Bulgarian government has refused to discuss the status of the seized Bitcoins, so it can’t be known for sure whether it is still holding them. Simultaneously, in any democratic country, large flows of government money must be reported, so if these Bitcoins were sold it would probably be officially documented and known by the public.

By far, the largest Bitcoin stash in the world is held by the creator of Bitcoin, Satoshi Nakamoto. Nakamoto mined BTC 1.1 million during the time after the genesis block when practically no one else was mining Bitcoin. During that era, it was possible to accrue large amounts of Bitcoin with just CPU mining, as opposed to now where warehouses full of ASICs that use as much electricity as a city mine far less Bitcoin than those CPUs. Nakamoto’s alleged accumulation is currently worth USD 7.26 billion.

Both stashes in discussion are split between multiple Bitcoin addresses to maintain anonymity. The biggest Bitcoin wallets in the world belong to major cryptocurrency exchanges Bitfinex and Binance with BTC 180,168 (USD 1.2 billion) and BTC 158,779 (USD 1.06 billion) respectively. Of course, these Bitcoins are the property of customers, so no single known individual or organization comes close to Bulgaria’s and Nakamoto’s stashes.

 

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Seized Crypto Millions Auctioned by German Prosecutors

Bavarian prosecutors are to auction off seized cryptocurrency worth nearly USD 14 million, estimated to be the highest such sale in German history, reports Cointelegraph.

The sale, originally reported in local news source Der Tagesspeigel on 28 May, involves 1,312 Bitcoins (BTC) and other digital currencies including 1,399 Bitcoin Cash, 1312 Bitcoin Gold, and 220 Ethereum.

The funds were confiscated as part of an investigation into online platform LuL.to. It is estimated that at least 30,000 people had used the platform before the website was shut down and the site operators were arrested last June by officers from the Bayern Central Cybercrime Office, according to Der Tagesspeigel.

German prosecutors stated that “since all cryptocurrencies are exposed to the risk of high price fluctuations or even total loss, the Bayern Central Cybercrime Office ordered an emergency sale”.

The seized cryptocurrencies were reportedly sold over the course of two months in 1,600 separate transactions with the selloff beginning in late February when the price of Bitcoin had plummeted from almost USD 20,00 to around USD 11,400. During the sale, the price dipped again to below USD 7,000 and then rose back to USD 9,000. With Bitcoin currently at around USD 7,400 at time of press, it seems as though the Bavarian police have timed it well, unless Bitcoin rebounds again in the future, suggests Fortune.

The auctioning of crypto assets seized by enforcement authorities is not unusual. In January this year, the US Marshals Service raised over USD 40 mln from the auction of BTC 3,812 seized during the course of civil and criminal proceedings in January. Other countries such as Sweden and Ukraine began auctioning seized Bitcoin last year, and earlier this year about BTC 2,000 was confiscated by the Finnish government after assets were seized from blockchain market Valhalla.

One of the most notable in terms of size was a seizure by Bulgarian police last year estimated to be enough to pay off one-fifth of Bulgaria’s national debt; a sum that would be worth approximately USD 1.5 billion at today’s Bitcoin price.

 

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