Bulgarian Crypto Bank To Sue State Over Money Laundering Claims

By

By Svetoslav Todorov

Bulgarian crypto lending bank Nexo on Friday said it will sue the Bulgarian state for as much as it can get after police raided their offices on Thursday. 

The company, which supports over 60 cryptocurrencies, is under investigation for money laundering, providing banking services without the required licence, tax crimes reported by the United States and breaches of international sanctions against Russia, among others. 

“The compensation that Bulgaria will pay after Nexo wins the case will be another record breaking amount of hundreds of millions, but, unfortunately it will be at the expense of the Bulgarian taxpayer,” the company stated on Friday. 

According to the crypto platform, no immediate search warrant was given and the police gave no identification, describing the raid as a publicity stunt and a shameful act. 

On Thursday, the National Security Agency raided Nexo offices in Sofia. Initially the Prosecution’s office did not name the firm and only described it as a “a company that operates globally through companies in the UK, Switzerland, the US and offshore destinations.

“It is not registered here but is managed operationally from Sofia, A total of 15 addresses are bring checked,” it said.

Nexo was founded in 2018 and functions through a number of entities in different markets. It is owned by Antoni Trenchev, a former MP in 2014-2015, and Kosta Kanchev. 

According to Bulgarian National Television, they are currently located in Dubai. Founder and former member Georgi Shulev, who left the board in 2019, is currently being questioned by authorities as a witness. 

On December 6, Nexo ceased activity in eight US states after unsuccessful discussions with state and federal regulators. The company described regulations in the US as “an impossible environment”.

An investigation by Bulgarian outlet Capital Weekly, published in October 2021, said the company had made a profit of about $100 million over the previous three years, plans to re-organize as a regular bank but was existing in a grey zone of regulations and was associated with concerning reports about the treatment of staff. 

According to previous statements by the Nexo, over 650 people are currently employed in Sofia. The company, claiming to be among the largest in the global world of crypto assets, said it has processed more than $130 billion for more than 5 million users across more than 200 jurisdictions. At the same time, there are no public reports on Nexo’s activity.

Balkan Insight

The Balkan Insight (fornerkt the Balkin Investigative Reporting Network, BIRN) is a close group of editors and trainers that enables journalists in the region to produce in-depth analytical and investigative journalism on complex political, economic and social themes. BIRN emerged from the Balkan programme of the Institute for War & Peace Reporting, IWPR, in 2005. The original IWPR Balkans team was mandated to localise that programme and make it sustainable, in light of changing realities in the region and the maturity of the IWPR intervention. Since then, its work in publishing, media training and public debate activities has become synonymous with quality, reliability and impartiality. A fully-independent and local network, it is now developing as an efficient and self-sustainable regional institution to enhance the capacity for journalism that pushes for public debate on European-oriented political and economic reform.

Leave a Reply

Your email address will not be published. Required fields are marked *