Cryptocurrency lending company Nexo is under a massive investigation in Bulgaria over allegations of its illegal activities. Bulgarian prosecutors are being investigated in the capital, Sofia. They are investigating the alleged formation of an organized crime group, tax crimes, money laundering, unlicensed banking, computer fraud and violations of international sanctions against Russia.
“In Sofia, active measures are being carried out as part of a pre-trial investigation aimed at neutralizing illegal criminal activity by the cryptocurrency lending company Nexo,” Sika Mileva, a spokeswoman for the prosecutor’s office, told reporters.
However, according to Mileva, the country is being investigated because the main organizers of the platform are Bulgarian citizens and the main activities are from Bulgarian territory.
Also Read: FTX Recovers R$26 Billion in Cash, Cryptocurrency and Bonds
Nexo was going to support Ruja Ignatova
Bulgarian prosecutors reported that $94 billion passed through the Nexo platform in the past five years. In fact, this equates to more than R$484 billion. Prosecutors also said that they had discovered that someone officially designated as a financier of terrorist activities used the platform to transfer cryptocurrencies.
Authorities also suspect that Nexo “acted according to the scheme of Ruja Ignatova,” a convicted Bulgarian fraudster, and the OneCoin pyramid she was leading. The “Queen of Cryptocurrencies,” as she is known, is among the FBI’s 10 Most Wanted Persons.
According to a spokeswoman for the prosecution, more than 300 investigators, police and security personnel participated in the operation. The prosecution said that Nexo operated through many companies, many of which were just “mailboxes,” that is, closed companies.
According to a Reuters report, Nexo’s public relations officer confirmed that the Bulgarian authorities were in one of their offices. However, he stated that the unit “only has operational functions related to expenses – payroll, customer support, back office”.
According to the website of the local Sofia News Agency, the investigation against Nexo started a few months ago. This came after foreign agencies spotted suspicious transactions, allegedly aimed at circumventing sanctions imposed by the European Union, Great Britain and the United States on Russian banks, as well as companies and citizens in the country.
According to the portal, the co-founder of Nexo, Anthony Trenchev, is a former MP from Bulgaria. In addition, other members of the management team are also Bulgarians, such as Georgy Shulev, son of former Deputy Prime Minister Lydia Shulev, Kosta Kanchev, Kalin Methodiev and Sokol Yankov.
Also read: Braiscompany: 8 thousand customers decry delays amounting to R$ 30 million
What did Nexus say?
The company posted on Twitter a series of statements claiming it had always cooperated with the authorities. In addition, Nexo has reported on the measures it is taking to prevent money laundering and combat terrorism.
The company also noted that “unfortunately, with the recent regulatory crackdown on cryptocurrencies, some regulators have struck first and asked questions later.”
“In corrupt countries, this is a border on extortion, but this, too, will pass,” He said One of the tweets. Finally, Nexo noted that it has always cooperated with regulators, saying it expects to announce “exciting news” in the coming weeks.
Nexo was founded in 2017 by Bulgarians Kosta Kanchev and Anthony Trenchev. The company’s business mainly consists in increasing crypto assets, on which interest is paid, and in granting loans against collateral. After the news of the investigation, more than $3 million (R$155 million) left the company’s platform. In addition, the company’s native cryptocurrency, NEXO, fell around 7% to R$3.70.