YEREVAN (CoinChapter.com) — Crypto lender Nexo has found itself under investigation as Bulgarian police raided their office in the country’s capital city of Sofia. The raid comes amid an investigation launched by prosecutors, accusing the company of illicit activities.
According to local media reports, at least 300 police officers, along with employees of the National Security Service and the National Investigation Service took part in the raid. Law enforcement authorities suspect Nexo was involved in money laundering, tax evasion, computer fraud, and unlicensed banking activity, among other criminal conduct. Moreover, prosecutors suspect Nexo violated international sanctions against Russia in the wake of the country’s ongoing invasion of Ukraine.
“On the territory of the capital, active actions are being carried out on the investigation with the aim of neutralizing illegal criminal activity of the Nexo cryptobank,”
Siika Mileva, the spokesperson of the chief prosecutor said in a statement.
Although the crypto lender is based out of the United Kingdom, it also has operations in Bulgaria. According to local media reports, the company had strong political connections.
As per the local newspaper Standard, Nexo is connected to the former MP of the Reform Bloc Antoni Trenchev, and his partner Kosta Kanchev. Moreover, it is also said to have connections with the son of the former Minister of Social Affairs Lidiya Shuleva.
The prosecutor’s office has accused the company of financial appropriation. Moreover, at least one person faces charges on the grounds of financing terror activities.
“For the last 5 years, more than 94 billion dollars have passed through the platform as a turnover. Evidence has been gathered that a person who used the platform and transferred cryptocurrencies has been officially declared a person who finances terrorist acts,”
the Chief Prosecutor’s office said.
This is not the first time Nexo has found itself in troubled waters. In September 2022, the state of New York filed a lawsuit against the company over alleged illegal operations and fraud. Several other US States also issued “cease and desist” orders against Nexo, ordering it to immediately stop operations in their territory. They accused the crypto lender of offering unregistered securities.
This led many experts to speculate that the company was already insolvent. As CoinChapter reported in October, Nexo founders Kalin Metodiev and Antoni Trenchev were forced to publicly deny rumors of its insolvency.
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NEXO hits back but promises to cooperate
After news broke of the recent raid by the Bulgarian Police, Nexo took to Twitter to address the allegations.
In a thread, it showed its displeasure at the way local authorities had handled the case and accused Bulgaria of condoning corruption. In an email response to the media, the company called Bulgaria “the most corrupt country in the EU“.
“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,”
the statement read.
However, the company also said it was cooperating with the relevant authorities and regulators.
Some experienced crypto investors have already advised their followers to withdraw their funds from Nexo.
“The best time to get your money out was yesterday, the second best time is right now. Who knows, maybe they end up being fine, but why take the risk?”
CryptoLark host Lark Davis tweeted.
Several crypto lenders, including Celsius Network, Hodlnaut, Genesis, and Voyager Digital, have already gone bankrupt. If the investigations continue, Nexo could be next in line to join them.
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