Four Bulgarians charged in probe into crypto lender Nexo

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SOFIA, Jan 13 (Reuters) – Four Bulgarians have been charged with taking part in an organized crime group set up to launder money and commit tax and computer fraud, investigators and prosecutors investigating the lender said on Friday. of Crypto Nexo.

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.

“This is an unprecedented investigation,” Borislav Sarafov, head of Bulgaria’s National Investigation Service, told reporters, saying Bulgaria would take the lead in an investigation that began months ago in coordination with its American, British and other counterparts.

Investigators said they reviewed more than 4 million crypto transactions on the Nexo platform and found that some were carried out in violation of EU and US sanctions against Russia, while others involved a person known to finance “terrorist” activities.

Crypto lender Nexo has denied any wrongdoing.

“There have been a host of allegations, all of which Nexo vehemently denies, as the platform uses the highest possible standards of know-your-customer and anti-money laundering practices to ensure security. our customers and the company as well,” he said in a statement to Reuters.

The company said it was the target of a politically motivated campaign ahead of impending snap elections in Bulgaria. He said his systems are currently operational and everything is processed in real time.

More than 20 people have been questioned so far and an international financial audit of Nexo will be carried out, with prosecutors saying the investigation is expected to take months.

Officials said two of the defendants had already been arrested and prosecutors would seek bail of 1 million leva ($553,801.85) each, while search warrants were issued for the other two.

The four defendants 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 an investigation “aimed at neutralizing illegal criminal activity” by Nexo, according to the prosecution.

Prosecutors said on Friday that the defendant owned luxury 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, crypto transactions worth $94 billion were carried out through the Nexo platform in the last five years.

Investigators say they have detected a number of transactions on Nexo by individuals and companies subject to European Union and United States sanctions against Russia, as well as other United Nations sanctions. , without giving further 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 following the collapse of a 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.

($1 = 1.8057 leva)

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

Our standards: The Thomson Reuters Trust Principles.

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