Nexo Probed In Bulgaria For Alleged Money Laundering

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Key takeaways:

  • The Switzerland-based company has been the focus of speculation about its liquidity; nevertheless, it is under investigation for much more nefarious activity.
  • Nexo said in December that it would discontinue offering its products and services in the US.

Authorities in Bulgaria are looking into the cryptocurrency lender Nexo on suspicion of money laundering, tax evasion, unauthorized banking, and computer fraud.

According to a statement posted on Facebook on Thursday, the Bulgarian Prosecutor’s Office is looking into Nexo’s criminal behavior in Sofia to neutralize it. The operation involves more than 300 individuals. Siika Mileva, the attorney general, stated in the statement:

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

Nexo stated on Twitter that the company was working with the necessary authorities and regulators. Additionally, the corporation asserted that it had always gone “the extra mile” to comply with legal requirements.

“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 corporation asserted that it had always gone “the extra mile” to comply with legal requirements. It follows news this morning from the local media outlet BNT that the Sofia headquarters of Nexo had been searched as part of a probe into financial crimes, including potential violations of international sanctions against Russia.

The disclosure comes after reports at the end of September 2022 that six US securities regulators were looking into Nexo and had taken legal action against the company’s loan services. The state of New York and Letitia James, the state’s attorney general, sued Nexo. James filed a lawsuit, and as a result, Nexo said it was leaving the American market. According to the chief prosecutor of Bulgaria’s spokeswoman, Nexo has received almost $94 billion in the last five years.

Over $3 million departed the company’s platform after hearing about the probe. As a result, the native coin of the lender fell by 7%, reaching as little as 70 cents. It cost a little less than 73 cents at the time of writing.

The management of Nexo emphasized that the company is constantly cooperating with the necessary authorities and regulators and that they feel the investigation and raid are unwarranted. However, prosecutors revealed that they searched the Sofia offices and that the probe had started months ago following allegedly questionable transactions. The disclosed transactions allegedly aimed to get around Western sanctions on the Russian Federation.

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