Four accused in Bulgarian probe into crypto lender Nexo – investigators

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SOFIA, Jan 13 (Reuters) – Investigators investigating crypto lender Nexo said on Friday that four Bulgarian citizens had been charged with participating in an organized criminal group for money laundering as well as tax and computer fraud.

Bulgarian prosecutors said on Thursday they had opened an investigation into alleged illegal activities carried out by Nexo, carrying out searches at the lender’s office and 14 other sites in the capital Sofia.

Nexo had said after Thursday’s operations that the raided office had no contact with customers but only had back-office functions. It said it has strict anti-money laundering and know-your-customer policies.

A Nexo spokesperson said the company would comment later on Friday.

Bulgaria’s prosecutor general said on Friday that the investigation began several months ago. Investigators were working in coordination with their American and British counterparts, and more than 20 people were interviewed. They planned to start an audit of Nexo, they said.

Officials said two of the defendants were already in custody, while the other two were wanted. They had been operating in the UK, Switzerland, Bulgaria and the Cayman Islands since 2018, officials said.

Some 300 investigators, police and security agents were involved Thursday in the operation, which was part of a preliminary investigation “aimed at neutralizing illegal criminal activity” by Nexo, according to the prosecution.

Prosecutors said on Friday that the defendant owned properties in Dubai and the Bahamas, including yachts. Some 35 works of art, including those of Salvador Dali, Henri Matisse and Pablo Picasso, had been seized from one of the defendants, investigators said.

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

Investigators said they detected a number of transactions on Nexo from people and companies under European Union sanctions against Russia, without giving details.

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

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

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

Reporting by Tsvetelia Tsolova; Written by Jason Hovet; Editing by Mark Potter and Mark Porter

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