Bulgaria’s chief prosecutors have denied any political motivations behind the probe against the crypto lending firm Nexo, amidst claims that the investigation was linked to the company’s political donations. According to spokesperson Siika Mileva, attacks and accusations are common in cases where a prosecution affects someone’s financial interests, asserting that it has become a national sport to criticize institutions. The investigation, which led to the search of Nexo’s offices in Sofia, was focused on uncovering a large-scale money laundering scheme and violations of Russia’s international sanctions.
Following the raid on Nexo’s offices, four individuals were charged with various crimes including money laundering, tax offenses, computer fraud, and unlicensed banking. Two individuals were released on bail while the other two remain at large and are internationally wanted. It remains uncertain if the charged individuals had any direct connection with the crypto firm. The spokesperson disclosed that Nexo had processed transactions totaling $94 billion over five years, and an organized criminal group operating in multiple countries since 2018 was under investigation by the authorities.
Amidst grievances from Nexo over the law enforcement raid, the company expressed intentions to pursue legal action against it for the damages caused by the sudden intervention. Nexo criticized the authorities’ approach as “kick first, ask questions later”, alleging that investigators failed to provide a search warrant for hours and did not identify themselves to Nexo employees during the raid. Nexo, which operates an investment platform enabling users to stake and borrow against crypto assets, does not offer services to Bulgarian residents due to regulatory concerns. The company, founded in 2018, runs offices in the UK, Bulgaria, and Switzerland.
In December 2022, Nexo announced plans to phase out its U.S. operations due to a lack of clear regulatory cooperation with American authorities. Despite the challenges faced by the company, it maintains its commitment to working with relevant authorities and regulators. Nexo expressed optimism about positive developments in the coming weeks as they navigate through the complexities of the legal issues surrounding their operations. While the investigations and charges against Nexo have raised concerns and criticism, the company’s focus remains on continued collaboration with regulators and ensuring compliance with legal requirements to operate within the cryptocurrency sector.
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