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Nexo Under Investigation In Bulgaria For Alleged ML Charges

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Crypto lender Nexo has found itself in the crosshairs of a large-scale investigation as Bulgarian authorities probe into allegations of money laundering, computer fraud, tax offenses, and other crimes. 

According to reports, authorities claim they have evidence a Nexo user has been declared a terrorist financier. 

Bulgarian Authorities Investigate Nexo 

Bulgarian authorities have launched an investigation into crypto lender Nexo. Authorities are investigating possible crimes related to money laundering, computer fraud, tax offenses, and a host of other offenses. Authorities have so far raided over 15 different sites in the country’s capital, Sofia, with over 300 personnel involved in the entire operation. A statement by the Bulgarian prosecutor’s office stated, 

“Active investigation actions are underway in the capital to neutralize illegal criminal activity of the Nexo crypto bank.”

The announcement of the investigation came after Nexo stated in December that it would be phasing out its US services and products after repeated clashes with regulators. A spokeswoman for the prosecutors’ office, Siyka Mileva, while speaking with reporters stated, 

“In Sofia, active steps are being carried out as part of a pre-trial investigation aimed at neutralizing an illegal criminal activity of crypto lender Nexo. It has been established that the main organizers of the international platform are Bulgarian citizens and the main activities are from Bulgarian territory.”

Evidence Of Illegal Activities 

Bulgarian prosecutors have claimed that around $94 billion have gone through the Nexo platform over the past five years. They also claim to have evidence that at least one of the platform’s users has been declared a financier of illegal and terrorist activities. However, the authorities have not elaborated further on their allegation as yet. 

“The main organizers of the scheme are Bulgarian citizens, and the activity was carried out mainly from the territory of Bulgaria. Evidence has been collected that a person who used the platform and transferred cryptocurrencies has been officially declared a terrorist financing person.” 

Nexo Cooperating With Authorities 

Nexo, on its part, stated that it was cooperating with regulators and relevant authorities and helping with the investigation. The company reiterated that it has always taken the extra step to ensure that it is in compliance with all regulatory standards. In a Twitter thread, Nexo stated, 

“Over the years, we have turned down a lot of business because Nexo never makes compromises with regard to our very stringent anti-money laundering and know-your-customer policies. But we have always known that this is how you build a sustainable business. Since day 1, we have gone the extra mile to implement cutting-edge solutions to ensure adherence to the highest regulatory standards and simultaneously provide a smooth customer onboarding journey.”

Being Unfairly Targeted 

Nexo also alleged that it is being targeted unfairly by the authorities and that regulators have adopted a “kick first, ask questions later” approach. 

“Unfortunately, with the recent regulatory crackdown on crypto, some regulators have recently adopted the kick first, ask questions later approach. In corrupt countries, it is bordering with racketeering, but that too shall pass.”

Antoni Trenchev, the co-founder of Nexo, stated. 

“There are authorities at one of Nexo’s offices in Bulgaria, which is, as you know, the most corrupt country in the EU. They are making AML and tax-related inquiries about a Bulgarian entity of the group that is not customer-facing but only has back-office functions – payroll, customer support, and compliance. We are one of the most stringent entities with regards to KYC/AML.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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