Bulgaria Launches Investigation into Crypto Lender Nexo, Raids Sites

[ad_1]

SOFIA, Jan 12 (Reuters) – Bulgarian prosecutors have opened an investigation into alleged illegal activities by cryptocurrency lender Nexo, they said on Thursday, raiding more than 15 locations in the capital Sofia.

The announcement comes after Nexo announced in December that it would phase out its US products and services over the next few months due to disputes with regulators.

“In Sofia, active steps are being taken in the framework of a preliminary investigation aimed at neutralizing an illegal criminal activity of the crypto lender Nexo,” Siyka Mileva, spokesperson for the prosecutors’ office, told reporters.

“It has been established that the main organizers of the international platform are Bulgarian citizens and that the main activities take place from Bulgarian territory,” she said.

Mileva said more than 300 investigators, police and security guards were involved in the operation. They investigate the formation of an organized criminal group, tax crimes, money laundering, unlicensed banking activity and computer fraud.

Prosecutors said Nexo operated through numerous companies, many of which were just “mailboxes.”

A Nexo public relations officer told Reuters by email that Bulgarian authorities were in one of its offices, but said the entity “only has functions related to operational expenses – payroll, customer support, back office”.

Crypto lenders act as banks for the crypto world, offering customers interest on the cryptocurrencies they deposit on the platform.

According to Bulgarian prosecutors, $94 billion has passed through the Nexo platform over the past five years.

They said they also established that a person officially accused of financing terrorist activities had used the platform to transfer cryptocurrency, without giving further details.

Lawmakers around the world have stepped up their calls for regulation of crypto firms after the collapse of major exchange FTX last year.

Businesses grew rapidly during the COVID-19 pandemic, but as crypto markets crashed last year, various crypto lenders froze withdrawals, leaving customers with significant losses. Major US-based lenders Celsius, Voyager Digital Ltd and BlockFi all filed for bankruptcy last year.

Reporting by Tsvetelia Tsolova, writing by Alan Charlish; edited by Jane Merriman and Jason Neely

Our standards: The Thomson Reuters Trust Principles.

[ad_2]