Nexo’s Offices Raided in Bulgaria, Four Individuals Charged in Allegations of Money Laundering

It has not been that long since Nexo decided to exit the US market, but in recent days the offices of Nexo have been raided in Bulgaria according to multiple reports.

While based in London, Nexo is affiliated with a former member of the Bulgarian Parliament. Nexo claims over five million users operating in 200+ jurisdictions.

According to Bloomberg, four Bulgarian nationals have been charged in the raid. Nexo is said to have 600 employees in Sofia but does not offer services, which include crypto trading, lending, etc., in Bulgaria.

A report by the Sofia Globe, claims that over 300 law enforcement individuals were involved in the investigation, which remains ongoing.

In an odd series of Tweets, Nexo said that since day one, they have “gone the extra mile to implement cutting-edge solutions to ensure adherence to the highest regulatory standards.”

The crypto platform adds that they currently have over 30 compliance officers for AML demands.

“Crypto is actually terrible for illicit purposes – using Chainalysis, for example, we know the history of the asset while it is being deposited and have a good understanding of the address to which it is withdrawn. This is more difficult with fiat and requires other techniques.”

Nexo does not mention the raid in Bulgaria at all.

In another strange Twist, the Chief Prosecutors Office of the Republic of Bulgaria has issued a statement today claiming that an investigation has been started against an “organized criminal group for money laundering, tax crimes, computer fraud and banking without a license.” The statement appears to be alluding to the raid but does NOT mention Nexo by name.

Deputy Prosecutor Genera Borislav Sarafov, the spokesperson of the general prosecutor Siika Mileva, stated that in the course of the investigation, with the permission of the court, 15 objects, offices, and homes were searched, a huge number of magnetic data carriers, computers, money, crypto-assets were seized. More than 20 witnesses were questioned, including anonymous ones.

“Some of them have expressed concerns for their safety and will be included in the Witness Protection Program,” said Sarafov. “The total value of the completed transactions is over 94 billion dollars. Transactions to a person convicted of terrorist activity were discovered.” [emphasis added]

The transgressions allegedly took place from the beginning of 2018 until January 12, 2023.

Bail for the four arrested individuals has been set at BGN 1 million or about $540,000. The four have been charged with alleged crimes perpetrated on the territory of Bulgaria, the United Kingdom, the Swiss Confederation, and the Cayman Islands.  All the accused are banned from leaving the country.

It was reported last September that New York Attorney General Letitia James has sued Nexo, joining seven other states in pursuing the crypto firm.

On December 5, 2022, Nexo announced the “gradual departure” from the US, stating:

“Our decision comes after more than 18 months of good-faith dialogue with US state and federal regulators which has come to a dead end. Despite inconsistent and changing positions among state and federal regulators, Nexo has engaged in significant ongoing efforts to provide requested information and to proactively modify its business in response to their concerns.

It is now unfortunately clear to us that despite rhetoric to the contrary, the US refuses to provide a path forward for enabling blockchain businesses and we cannot give our customers confidence that regulators are focused on their best interests.”

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