Bulgarian Authorities Ransack Nexo’s Offices in Connection to Money Laundering

Crypto lender Nexo whose proposal was recently rejected by embattled Singapore lending firm Vauld Group was raided by Bulgarian authorities over accusations of money laundering and tax offenses. According to local media house Bulgarian National Television, Nexo’s offices located in Sofia, the capital city of Bulgaria were ransacked by a group of prosecutors, investigators, and some international agents.

Altogether, over 300 police officers searched 15 locations known to be connected to Nexo. For now, the investigation is still limited to Bulgaria according to the region’s chief prosecutor’s spokeswoman Siyka Mileva. This investigation started a few months ago with its focus on a massive financial scam involving money laundering and the violation of sanctions against Russia.

The Bulgarian authorities suspect Nexo’s involvement in the scheme. It is believed that the Switzerland-based crypto lender is entangled in unlicensed bank activities in addition to other allegations. Antoni Trenchev, the co-founder of Nexo who also doubles as a one-time Bulgarian lawmaker, confirmed the news of the raid.

“They are inquiring about a Bulgarian entity of the group that is not customer-facing but only has OpEx-related functions,” he stated, speaking of operational expenditures. “This is a coordinated attack as is evident from the absurd allegations.”

Nexo Denies Involvement In Money Laundering 

The company has also spoken on the allegations from the authorities;

“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,” Nexo tweeted, attempting to deny the allegations. 

The company went on to talk about how it has introduced structures to ensure compliance with regulatory standards including anti-money laundering (AML) schemes, publication of OFAC sanction lists, and many other required solutions. Nexo opined that it was wrongly targeted citing that the recent hype around regulation has brought about a ‘kick first, ask questions later’ strategy amongst prosecutors in the crypto industry.

The pressure on Nexo is mounting further in several jurisdictions. Eight United States cities have already filed a cease-and-desist order against the firm on the basis that it sold unregistered securities. Eventually, Nexo decided to shut down its U.S. operations for the meantime till it has settled with the authorities over their claims.