Nexo News Roundup | Bulgarian office raided on money laundering charges, Nexo counterclaims illegal actions, users withdraw over 250 million

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January 12: Bulgaria Raids Nexo Office, Accusing of Money Laundering

Bulgarian authorities conducted a raid on the office of the crypto lending platform Nexo to investigate allegations of money laundering and tax crimes. A statement released by Bulgarian authorities indicated that evidence collected suggested individuals using the platform to transfer cryptocurrencies were officially declared as funding terrorism.

A spokesperson for Nexo stated that their office in Bulgaria, which is not client-facing, only handles back-office functions such as payroll, customer support, and compliance. They claim to have one of the strictest Know Your Customer (KYC) policies.

Over the years, we have turned down a lot of business because Nexo never makes compromises with regard to our very stringent anti-money laundering and know-your-customer policies. But we have always known that this is how you build a sustainable business. 1/

— Nexo (@Nexo) January 12, 2023

January 13: NEXO Complains of Illegal Actions by Bulgarian Government

According to a report by the Bulgarian news agency BTA, Nexo has filed a complaint against the actions taken by law enforcement in their investigation and is preparing to sue the authorities for damages incurred during the raid. The report stated that investigators did not present a search warrant during the several hours of search, and the officers never identified themselves. Nexo believes the raid by Bulgarian authorities was illegal and that they did not provide any services to Bulgarian residents.

Real-time platform asset data provided by Nexo showed that the raid resulted in over $150 million in withdrawals, with assets totaling around $2.5 billion dropping to approximately $2.354 billion by 2:00 AM EST on Thursday. Nexo co-founder Antoni Trenchev stated that the withdrawal amount accounted for about 2% of the total assets managed by the company, and all systems were operational with withdrawals being processed in real-time.

Bulgarian investigators mentioned they are coordinating their investigation with counterparts in the US and UK, as Nexo has had a significant amount of transactions from Russian individuals and companies under EU sanctions.

Other Key Event: Failed Acquisition of Vauld

On January 6, the crypto lending platform Nexo accused the former management and CEO Darshan Bathija of Vauld in an open letter of not prioritizing the interests of Vauld creditors and attempting to push Nexo out of the deal to support a fund management company. Nexo stated they remain committed to completing the transaction to create the maximum value for Vauld creditors.

Prior to this, Vauld rejected Nexo's acquisition proposal and requested a response regarding their repayment capability by January 6.

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