Bulgarian police raid offices of cryptocurrency lender Nexo

Bulgarian law enforcers are investigating crypto lender Nexo for alleged non-compliance with anti-money laundering (AML) and Know Your Customer (KYC) rules

According to Siika Mileva, a spokeswoman for the Bulgarian Prosecutor General, the searches were carried out as part of checking information about the use of the Nexo platform by organized crime, money laundering, tax violations, fraud and the provision of banking services without a license. According to law enforcement officials, investigators have evidence that the Nexo client who used the platform to transfer cryptocurrencies was a terrorist financer. The persons under investigation are citizens of Bulgaria.

More than 300 law enforcement officials have been involved in the investigation, including the police, gendarmerie, investigators and the State National Security Agency of Bulgaria. The pre-trial proceedings were under the control of the Prosecutor’s Office of the City of Sofia. Mileva noted that searches and interrogations are still ongoing, and any charges will be brought after the analysis of the collected data.

Nexo management commented on the situation in
series of tweets, stating that the platform never compromises on AML and KYC compliance. The Nexo team said it uses Chainalysis tools to check for suspicious transactions, but fiat currencies are much more complicated and require different methods. According to Nexo’s tweet, the site is willing to cooperate with regulators, but many of them take a “first fist, then questions, which is like racketeering in corrupt countries.”

Last year, eight US state regulators filed lawsuits against Nexo, demanding that the crypto lender stop promoting interest-bearing crypto products that are subject to securities laws. In December, after claims from supervisory authorities, the Nexo service announced its withdrawal from the US market.