Bulgarian cryptocurrency lending platform Nexo has become the target of a major investigation by Bulgarian authorities into illegal activity conducted via the platform.
A statement by a spokesperson for attorney general Siika Mileva announced that investigations are underway in the Bulgarian capital Sofia to “neutralise illegal criminal activity of the Nexo crypto bank”.
“The main organisers of the scheme are Bulgarian citizens and the activity was carried out mainly from the territory of Bulgaria,” said the spokesperson, stating that over 300 officers are involved in the action.
Organised crime, money laundering, tax offences, banking without a license and computer fraud are all being investigated.
According to the statement, Nexo has operated for five years using multiple different postal box companies, with a total of US$94bn dollars being transacted through the platform.
Some of those transactions may have involved very high-risk players with links to terrorism.
Nexo tweeted today that it has over 30 anti-money laundering officers “who ensure that we retain a real-time picture of our clients, which includes adverse media publications, OFAC sanctions lists, and source & flow of funds.”
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.— Nexo (@Nexo) January 12, 2023
Despite announcing an exit from the US in December due to legal issues, it appears that Nexo has continued to offer its services in the country.
Bulgaria police have raided 15 addresses in relation to the case, including its head office in Sofia.
There have yet to be any arrests, and more information is due to be released on Friday.
Nexo was established as a cryptocurrency buying and lending platform in 2018 by Bulgarian native Antoni Trenchev, who served as a member of parliament in Bulgaria’s National Assembly from 2015 to 2017.
During this time, he promoted the implementation of blockchain solutions for government administration.
According to his LinkedIn page, he served as a member of the Committee on European Affairs and Oversight of the European Funds.
In a written statement to Proactive, Nexo said: “What I can confirm for now is that you can clearly see that we are fully operational, and I am sure you know that FUD (an acronym for fear, uncertainty and doubt) is very common in the industry.
“There are developments still to be made on the matter, but we will be sure to comment on everything in detail as soon as possible.”