The premises of the cryptocurrency platform Nexo were searched in the city of Sofia in Bulgaria. Police suspect Nexo of money laundering and violation of sanctions imposed on Russia. In a lengthy thread, the Nexo platform categorically denied these accusations. The search resulted in significant withdrawals of funds from the platform by Nexo’s clients.
Nexo searched for money laundering
After the collapse of Voyager, Celsius or BlockFi, Nexo is one of the last big centralized players allowing the lending and borrowing of cryptocurrencies. Today, this company is going through difficult times. Indeed, Nexo’s premises have been raided by the police in Sofia, Bulgaria.
The Bulgarian authorities have given more details about the precise facts accused of Nexo. According to Siika Mileva, spokeswoman for the Sofia City Prosecutor, nearly 94 billion dollars have passed through Nexo in the last five years. Among the users of the platform is at least one person who finances terrorist activities, she informs.
This is also according to Svetlo Vasilev, the head of the Cybercrime Department in the city of Sofia. In addition to the Nexo user already formally identified, Svetlo Vasilev said that other transactions on the Nexo platform have involved other actors at risk.
A customer of the platform who transferred cryptocurrency has been officially declared an organizer of terrorist activities. It remains to be determined who will be charged for these crimes. More than 15 addresses are being sought and more people are being identified.Svetlio Vasilev, Head of the Cybercrime Department
According to some sources, Nexo is also accused of violating sanctions against Russia. At least, this is what a local newspaper reports, which does not hesitate to compare Nexo to OneCoin. This crypto scam founded and promoted by the Bulgarian Ruja Ignatova has lost 4 billion dollars to its users. Last seen in Sofia, Bulgaria in 2017, Ruja Ignatova is nowhere to be found while her main accomplice has confessed.
Nexo denies all charges against it
Reacting to the legal troubles it is facing, the Nexo platform has vigorously rejected the accusations of the Bulgarian justice. It believes that the Bulgarian authorities have moved to search before requesting the necessary information from Nexo.
In a series of tweets, the platform claims to have taken measures against money laundering. Nexo says it has even refused some profitable offers in compliance with its own integrity.
In addition to the automated restrictions, Nexo says it has hired more than 30 AML compliance officers who ensure compliance with its customer identification and anti-money laundering policies. The platform even states that, unlike fiat, it’s not easy to conduct illicit activities with crypto. Indeed, thanks to Chainalysis, Nexo says it knows where the asset on its platform came from and to which address it was withdrawn.
Nexo also reacted to accusations of non-compliance with sanctions against Russia. The platform recalls that at the beginning of the war in Ukraine, it launched a fundraising campaign in solidarity with Ukraine. This campaign had mobilized nearly $ 700,000 of emergency humanitarian aid last April. These funds were donated to local associations that help Ukrainians in distress.
In addition to helping Ukrainians, Nexo claims to have complied with the sanctions imposed on Russia. The platform says it was one of the first to take a very strict approach to this issue. Finally, Nexo says it continues to cooperate with the relevant authorities and regulators to find a good outcome to this case.
Wave of fund withdrawals on Nexo
As FTX clients struggle to recover their funds after the collapse of SBF’s exchange, the search of Nexo’s offices in Bulgaria quickly alerted users of the platform to rush to withdraw funds. According to The Block newspaper, Nexo saw withdrawals worth more than $158 million 24 hours after its offices were raided.
No panic at the moment at Nexo. The platform has not suspended withdrawals and reassures that everything is under control. According to Antoni Trenchev, Nexo’s co-founder, the number of withdrawals is only about 2% of the total assets managed by the company. Compared to FTX or Celsius, this is a small business, he says.
The legal troubles against Nexo come at a time when centralized crypto players are struggling. If Nexo is found guilty of the charges against it, which we don’t want to see, the trust of crypto users in centralized platforms would fall even further. Regardless of the outcome of this case, crypto will continue on its way.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.