Nexo Calls Bulgaria “Corrupt” As Authorities Designate Firm As “Financial Terrorists”

The falling dominoes of crypto lenders have seemingly made its way to Nexo. The London-based firm found its offices in Bulgaria raided by authorities as part of an investigation on suspicion of money laundering, tax offenses, banking without a license, and computer fraud.

Financial crimes also include violations of international sanctions against Russia.

According to a statement on Thursday, the Bulgarian Prosecutor’s Office is conducting an investigation in Sofia to “neutralize the criminal behavior” of Nexo. The operation involves more than 300 individuals.

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

The suspicion is that the Bulgarians behind the company followed Ruja Ignatova’s pyramid scheme with her crypto OneCoin. Ignatova, a Bulgarian-born German, is still on the run and is part of the FBI’s and Europol’s most wanted list.

The investigation into the crypto company’s activities in Bulgaria began a few months ago, after foreign services detected suspicious transactions that were reported to be aimed at circumventing sanctions imposed by the European Union, the United Kingdom, and the United States on Russian banks, as well as companies and Russian citizens.

Despite being headquartered in London, most of the firm’s employees are Bulgarian. Antoni Trenchev, co-founder and managing partner, was elected to the National Assembly of the Republic of Bulgaria in 2014, serving until 2017. Another co-founder, Kalin Metodiev, is the chairman of the CFA Society Bulgaria, according to his LinkedIn account.

Co-founder Georgi Shulev, who’s in a legal battle with Nexo, is the son of Bulgarian former Deputy Prime Minister Lidiya Shuleva.

Nexo’s employee profile
Source: LinkedIn

Nexo put out a statement reiterating that they ensure “adherence to the highest regulatory standards.”

“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,” the company said.

“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,” it added.

A Nexo spokesperson said in an email to CoinDesk 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 [anti-money laundering] 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, compliance,” said the spokesperson.

Following the announcement of the probe, more than $3 million was removed from the company’s platform. The lender’s native coin fell almost 7% to as low as $0.70.

Information for this briefing was found via CoinDesk, Novinite, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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