Crypto lender Nexo has found itself the subject of a large-scale investigation in Bulgaria, as prosecutors look into possible money laundering, tax offenses, computer fraud, and other crimes.
Over 300 people are involved in the operation in the country’s capital city of Sofia, according to a statement by the Bulgarian Prosecutor’s Office. "Active investigation actions are underway in the capital to neutralize illegal criminal activity of the Nexo crypto bank," reads a rough translation of the statement.
Nexo lets users earn interest on their idle cryptocurrencies as well as take out crypto-backed loans for cash.
Officials also say they have evidence that at least one person who used the platform to transfer cryptocurrencies has been officially declared a financier of terrorist activities.
In a Twitter thread, Nexo said it was cooperating with the relevant authorities and regulators. The company also insisted it had always gone the “extra mile” to adhere to regulatory standards.
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. 2/
— Nexo (@Nexo) January 12, 2023
“Unfortunately, with the recent regulatory crackdown on crypto, some regulators have recently adopted the kick first, ask questions later approach,” Nexo said. “In corrupt countries, it is bordering with racketeering, but that too shall pass.”
It comes after local media site BNT reported this morning that Nexo’s Sofia offices had been raided as part of an investigation into financial crimes, including violations of international sanctions against Russia.
Nexo co-founder Antoni Trenchev told Decrypt vial email that "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.”
That report also suggested that there was a link between Nexo and the most-wanted fraudster Ruja Ignatova, the missing founder of the Ponzi scheme OneCoin. But official statements have yet to mention OneCoin.
Decrypt has contacted Nexo, Bulgaria’s national security agency, and local and international law enforcement for comment.