The week: Drained to zero

The speed with which this scheme is growing is alarming. In the company's Balkan-wide Telegram group, which only includes people who have already invested money, there were nearly 20,000 people as of November 20. Days earlier, there were thousands less. Ivaylo Todorov, one of the administrators of BETL groups and among the company's earliest partners in Bulgaria, explained to Capital that currently the number of investor partners in the country top 12,000.

Another problem is the way the money is handled. It is sent via the largest stablecoin Tether (USDT), whose value is equal to the US dollar. Capital was able to track two of BETL's wallets on the TRON blockchain, preferred for its low transaction fees. As of November 20, one of them had USD 1.5 million, and the other had USD 900,000. In the last three months the wallet has been drained completely 12 times, each time by an amount between USD 1.1 and USD 1.5 million, i.e. a total of about USD 16 million from just one wallet. After the funds accumulate, they are transferred to wallets on Binance.

The creator of the scheme seems to be British citizen Muzaffar Ahmed Riaz. There is indeed Blue Electric Technology Limited registered in London on December 29, 2023. Riaz is also creator and owner of several other companies, all of which seem to be copy-cats directed at various "hot topics" - solar power, tv production, etc.

So there you go - when you consider Historical Park, OneCoin and others, it seems to me that the need for financial education is proving more and more urgent.

This newspaper is co-written by

Monika Varbanova and Martin Dimitrov

1. Politics this week:

Still no Speaker in Parliament

Three weeks into the life of the 51st National Assembly and MPs have yet to select a new Speaker - the sole action that can at least kickstart coalition talks and the exploratory mandate process by the President. So far, seven futile attempts have been made by the deputies, all of them in vain. But when you push so hard, something's gotta give. And this something turned out to be the second party WCC-DB.

The two renegades

The most recent, seventh vote that was supposed to see TISP's Silvi Velikov - the oldest MP and acting speaker of the Assembly - selected as the permanent speaker on Thursday, failed by only two votes. The two dissidents turned out to be WCC co-founder Daniel Lorer, who was at one point briefly nominated for EU Commissioner; and Yavor Bozhankov, a former BSP renegade known for his stinging comments primarily aimed at Vazrazhdane, and for his electric monocycle branded with the "Hello, Kitty" logo that he often uses for his commute.

Goodbye Kitty (and Lorer)

This resulted in WCC expediently kicking them both out of the party and the Parliamentary group or so they thought, until their partners from Democratic Bulgaria (which outnumber WCC's) voted to stop their dismissal from the Parliamentary group. The reason? This risked making the pro-Putin Vazrazhdane the second largest party, which in turn would have made it eligible for an exploratory mandate. But we haven't crossed that bridge yet anyway.

The Constitutional Court steps in

And if things don't seem crazy enough right now, the Constitutional Court released a ruling on Tuesday that effectively calls for the recounting of the votes in (supposedly) 1,777 polling stations across the country - or just under 15% of all polling stations, over potential irregularities linked to the count. "Supposedly", because an investigation by media and election observers showed that some of the ID numbers of the polling stations are either non-existent or are duplicated in the decision issued by the court.

2. Economy:

Two new private equity funds approved A second batch of private equity funds has been approved for funding under the Bulgarian Recovery Plan by the European Investment Fund (EIF). These are Integral Venture Partners, already known as an investor in the country, which has a Bulgarian founder, and the German-based Finance in Motion, which has not invested in Bulgaria so far.

They will distribute 15 million and 12.5 million euro from the Recovery plan, respectively. Before them, two other private equity funds got money from the EIF under the Recovery Plan. In early July, 20 million euro was directed to BrightCap's new fund to support early stage companies, while 15 million euro went to Austrian investment firm Accession Capital Partners (ACP), formerly known as Mezzanine Management, for its latest fund for Central and Eastern Europe, ACM V, which will finance mature companies in the growth phase.

Figures:

34%

Of all procurement orders in Bulgaria last year had only one participant, shows an analysis by the Institute for Market Economy. This is still a lot, but it's a surprising improvement: a 2022 Ministry of Finance analysis showed that almost 60% of all municipal orders were contracted in bids with only one participant.

27%

The annual growth in housing loans, which has accelerated further, reaching 24 billion levs, despite measures introduced by the Bulgarian National Bank (BNB) at the start of October to cool the housing loan market.

2.7 billion leva

The total economic contribution from Lidl Bulgaria's operations for 2023, according to an analysis by the Institute for Market Economy (IME), amounting to an increase of 11% compared to 2022 and nearly 67% compared to 2021.

3. Business:

Software AMPECO

The Bulgarian company for software management of charging infrastructure for electric vehicles struck a new investment deal worth USD 26 million with the French venture capital fund Revaia. This probably makes the company's evaluation reach 300 million levs according to observers.

Energy

BEH

The credit rating agency Moody's downgraded the rating of the Bulgarian Energy Holding (BEH) from "positive" to "stable" over the poor financial situation of the state-owned company, pointing also to the planned construction of two new units at Kozloduy NPP.

4. Energy:

The huge new problem for Russian gas transit: US sanctions

There is a real possibility that the transit of Russian gas through Bulgaria via the TurkStream pipeline might be stopped in early 2025, as Gazprom will not be able to pay its transit fees. The reason is that a few days ago the US Treasury announced through the Office of Foreign Assets Control (OFAC) new sanctions against the Russian Gazprombank.

Up to now, this step was not taken and was left as a loophole for Moscow to be able to receive payment from its European clients. Now this option will become void, as there is no European, Turkish or other bank that would accept to work with a US-sanctioned Russian institution if it wanted to have operations in the Western world as well.

Show me the money

Capital spoke to experts who believe that sanctions are tantamount to removing Gazprombank from the global financial system. And Gazprom will have to find another way to receive and send money if it wants to continue making deals and using European infrastructure. The specific implications for Bulgaria are the transit fees Gazprom pays for the use of TurkStream, which go through Gazprombank. If they can't pay, they can't transit. This could also mean the suspension of gas to Serbia and Hungary.

5. Brussels:

#New Commission - The European Parliament has elected this week the second von der Leyen Commission by 52 votes (an extremely small margin). It will take up its work on December 1 and will then have 100 days to tackle its most important tasks under the mandate. Apart from the fact that MEPs do not particularly like either von der Leyen or her new team of EU Commissioners, they are also deeply divided among themselves and cannot form a pro-European majority. Most of the important dossiers will be passed with ad hoc majorities and the outcome will be unclear until the last moment.

#RRF - The European Commission is expected to announce its decision on whether Bulgaria will receive a second payment under the Recovery and Resilience Plan and how much it will amount to. For more than a year, the Bulgarian Parliament has been blocking four reforms that were supposed to release the full amount of 623 million euro from the Plan.

6. Watch out for:

People:

Orlin Rusev and Bisser Dzhambazov

The two men from the so-called Bulgarian Six, which has been under investigation for spying for Russia by London, have confessed to being Russian spies."Between 2020 and 2023, these defendants, along with a number of other people, spied for Russia," prosecutor Alison Morgan has said, according to a statement. "They all knew why they were tasked with their operations. Their activities were carried out for the direct or indirect benefit of Russia," she added. The other four of the network continue to deny their charges. The six were arrested almost two years ago by the British services.

Calin Georgescu

The surprise winner in the Romanian presidential elections, who got 23% of the votes in the first round and seems to be a huge unknown, floated to the top by a sudden rush of Tik-Tok adverts, is a huge warning sign for Bulgaria. If a rather stable system with around 30% trust can be almost destroyed by a well-designed shot (possibly from abroad), imagine what could happen with a system like Bulgaria, where trust is drained to zero.

Institution:

For the Earth

The Swedish environmental activist seems to like Bulgaria. First, she was spotted walking around Sofia in September. And then, this week, the Plovdiv-based Pod Tepeto online media saw her sipping a latte in the Kapana district in the city. Question is - does she make all of her trips to Bulgaria using the low-emission services of the National Railways?