Crypto Lender Nexo Under Investigation for Alleged Money Laundering, Russian Sanction Violations in Bulgaria

According to several reports, Bulgarian law enforcement officials are investigating crypto lender Nexo for alleged money laundering and sanctions violations. Siika Mileva, a spokesperson for Bulgaria’s attorney general, said the probe into Nexo is a large-scale operation involving 300 investigators from various agencies, including the National Security Service, Gendarmerie, and Sofia Police.

On Jan. 12, 2023, reports indicate that Bulgarian law enforcement officials raided cryptocurrency lender Nexo’s offices. The company is under investigation for violating sanctions against Russia and money laundering crimes, according to Siika Mileva, spokesperson for Bulgaria’s attorney general. The head of Bulgaria’s cybercrime unit, Svetlio Vasilev, stated:

A client of the platform who transferred cryptocurrency has been officially declared an organizer of terrorist activity. It remains to be determined who will be charged with the crimes. More than 15 addresses are being searched, and new persons of interest are being established.

Nexo, which is based in London but also operates offices in Sofia where the raid took place, immediately denied any wrongdoing in a statement on Twitter following the story. “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,” the company said on Thursday. Nexo added:

Unfortunately, with the recent regulatory crackdown on crypto, some regulators have recently adopted the kick first, ask questions later approach. In corrupt countries, it is bordering with racketeering, but that too shall pass.

The news follows reports at the end of September 2022 that a half-dozen securities regulators from the United States were probing Nexo and filed actions against the firm’s lending services. The state of New York and attorney general Letitia James also filed a lawsuit against Nexo. Following the lawsuit from James, Nexo declared it was exiting the U.S. market. The spokesperson for Bulgaria’s chief prosecutor detailed that roughly $94 billion has been funneled through Nexo over the last five years.

Nexo’s executives believe the investigation and raid are unfounded and further stressed that the company is “always cooperating with the relevant authorities and regulators.” In addition to searching the offices in Sofia, prosecutors detailed that the investigation was launched several months ago after alleged suspicious transactions were made. Allegedly, the reported transactions were meant to circumvent Western sanctions imposed against the Russian Federation.

What are your thoughts on the allegations against Nexo and the ongoing investigation into their business practices? Let us know what you think about this subject in the comments section below.