Yesterday afternoon several major banks in Bulgaria terminated accounts held by the country’s cryptocurrency exchanges. The banks are also blocking transfers to and from international Bitcoin exchanges. The country’s affected exchanges have temporarily suspended their services.

Crypto exchanges that offer crypto to fiat transactions very much rely on traditional fiat banking. But the anonymous nature of cryptocurrency means that it is riskier to transact in, given that transactions are difficult to reverse.

This week in Bulgaria major banks decided to do away with this risk by force. The swift move to block accounts held by Bulgarian crypto exchanges was evidently a coordinated decision made by Bulgaria’s top banks.

The move was unrelated to any explicit government decision or regulation. Participating banks appear to be trying to mitigate risk by not transacting in Bitcoin or other cryptocurrencies.

Who exactly is involved?

According to a post from the administrator of the Bulgarian Bitcoin forum, the banks closed the accounts of all companies whose activities are related to the purchase or sale of Bitcoin. In addition to Fibank, affected companies mentioned the United Bulgarian Bank (UBB) as one of the banks blocking accounts.

In a post in the same thread of the Bitcoin forum, the alleged managing director of an affected company, Neven Dilkov, wrote that though the UBB also blocked their accounts, not all banks in the country are taking this harsh stance:

“I spoke with Societe Generale and Piraeus separately [and] both banks do not have a problem with companies working with cryptocurrencies.”

Crypto exchanges affected by this week’s crackdown include Cix.bg, Crypto.bg, and Cryptobank.bg. According to their site, the latter is still open for trading but is accepting funds only via ePay.

Plus, in addition to Bitcoin, the exchange has temporarily suspended trading in Ether due to overloads on the network caused by CryptoKitties.

Bulgarians looking to purchase Bitcoin for fiat can still do so via Coinbase and LocalBitcoins.

Separately, Bulgaria and Bitcoin recently made headlines because of a government raid made back in May. With the recent spike in Bitcoin’s price, the 200,000 Bitcoins seized in May in a series of raids made by Bulgarian law enforcement are now worth over $3 bln.

This sum is a six-fold increase from the time of the raids when the entire seizure was worth just $500 mln. It remains unclear what the Bulgarian government is planning to do with the seized funds.