The cryptocurrency lender Nexo is reportedly under investigation by Bulgarian law enforcement. They may have been committing money laundering and sanction violations.
Raid on Nexo offices
Bulgaria’s law enforcement officers raided Nexo’s offices. This is because the company is being investigated for possible violations of Russian sanctions and money laundering. Svetlio Vasilev, head of the Bulgarian cybercrime unit, stated the following:
A customer of the platform who transferred cryptocurrency has been officially declared an organizer of terrorist activities. It has yet to be determined who will be charged with the crimes. More than 15 addresses are searched and new interested parties are found.
Kick first, ask questions later
Nexo itself is officially based in London, but also has offices in Sofia. The raid took place in the latter. Nexo immediately denied any wrongdoing in a statement on Twitter. The company said the following:
Over the years, we have rejected many cases because Nexo never compromises on our very strict Anti-Money Laundering and Know-Your-Customer policies. We have always known that this is how you build a sustainable company. Unfortunately, with the recent regulatory crackdown on crypto, some regulators have recently adopted the kick first, ask questions later approach.
Nexo has already left the US
At the end of September last year, several regulators from the United States (US) investigated Nexo. Claims had also been filed against the lender and a lawsuit had been filed against the lender in New York.
After the lawsuit, Nexo stated that they would exit the US market. The Bulgarian Chief Prosecutor’s spokesperson indicated that approximately $94 billion has been channeled through Nexo over the past 5 years.
According to Nexo’s executives, the new investigation and raid is baseless. She further emphasized that the company always cooperates with the relevant authorities and regulators.
In addition to searching the offices in Sofia, the investigation is said to have started several months ago after alleged suspicious transactions were made. Reportedly, the reported transactions were designed to circumvent Western sanctions against the Russian Federation. It is not yet known what the consequences of the investigation and raid will be.