- Nexo has been the subject of a police raid at its Bulgarian offices
- The company is alleged to be involved in a large-scale financial crime scheme
- Nexo didn’t deny the charges but said that it has followed the law in the country
Cryptocurrency lender Nexo, which recently quit the U.S. after pressure from regulators, is now in trouble in Europe. Offices of the company in the Bulgarian capital of Sofia were searched this week by prosecutors, investigators, and foreign agents as part of an operation targeting a large-scale financial criminal scheme involving money laundering and violations of international sanctions against Russia. The investigation is said to involve Nexo’s alleged ties to the Bulgarian government, although Nexo has denied wrongdoing, accusing authorities of a “kick first, ask questions later approach”.
Nexo Involved in “Criminal Activity”
The raid took place yesterday and was reported by local media, with the Bulgarian Prosecutor’s Office saying in a television statement that an active investigation was underway in Sofia to “neutralize illegal criminal activity of the Nexo crypto bank” (translation). The agencies are looking into possible money laundering, tax offenses, computer fraud, and other crimes using Nexo, although it is not known if Nexo is thought to be merely a conduit for the illegal actions or was involved at a higher level.
Officials added that they have evidence of at least one person using the platform to transfer cryptocurrencies who has been officially declared a financier of terrorist activities, which is why Nexo has been targeted. Bulgarian National Television also highlighted the fact that Nexo was co-founded by former Member of Parliament Antoni Trenchev and Georgi Shulev, the son of former deputy prime minister Lydia Shuleva, as another link in its potential involvement.
Nexo Fails to Respond Directly
Nexo declined to mention the raid specifically in a tweet thread that was clearly aimed at the action, saying instead that it had worked with regulators “since day 1”, that it had an entire financial crime department and that it used Chainalysis software to detect illicit funds:
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. 1/
— Nexo (@Nexo) January 12, 2023
Nexo decided to end its U.S. operations in December last year, blaming overzealous regulators after it was hit with eight simultaneous cease-and-desist orders in the country.