Report: Crypto Lender Nexo Raided in Money Laundering Probe

Bulgarian police have reportedly raided cryptocurrency lender Nexo in a money laundering and tax probe.

Authorities are looking into Nexo on suspicion of money laundering, tax crimes and offenses involving unlicensed banking activities, Siyka Mileva, a spokesperson for Bulgaria’s chief prosecutors, told reporters, per a report by Bloomberg News on Thursday (Jan. 12).

The raid, part of a flurry of law enforcement activity involving crypto companies, was confirmed by Antoni Trenchev, Nexo’s co-founder and a former Bulgarian lawmaker, Bloomberg said.

“They are inquiring about a Bulgarian entity of the group that is not customer-facing but only has OpEx related functions,” he said, referring to operational expenditures. “This is a coordinated attack as is evident from the absurd allegations.”

Reached for comment by PYMNTS, a Nexo spokesperson said the company is cooperating with investigators, and that its core business was not affected, as the entity at the center of the investigation was not customer facing.

“Nexo adheres to the most stringent AML and know your customer (KYC) standards and believes it is a victim of an organized attack to disrupt its market leading position,” the company statement said.

The raid comes a little more than a month after London-based Nexo announced it was ending its operations in the U.S. after 18 months of negotiations with state and federal regulators came to a “dead end.”

“It is now unfortunately clear to us that despite rhetoric to the contrary, the U.S. refuses to provide a path forward for enabling blockchain businesses, and we cannot give our customers confidence that regulators are focused on their best interests,” Nexo said in a blog post.

Earlier in the year, regulators in eight different states filed charges against Nexo, saying the company had failed to register its Earn Interest Product.

The regulators from New York, California, Kentucky, Maryland, Oklahoma, South Carolina, Washington and Vermont all issued administrative actions against the firm on the grounds that its accounts should be qualified as securities and registered that way.

The company’s decision to cease doing business in the states was among the reasons given last month when Nexo’s planned acquisition of crypto firm Vauld fell apart.

Thursday also saw reports that the Department of Justice was investigating two brothers who had founded the Solana stablecoin exchange Saber Labs.

Also Thursday, the figure at the center of the world’s highest-profile crypto investigation proclaimed his innocence yet again.

Writing on Substack, FTX founder Sam Bankman-Fried gave the public his most detailed personal take to-date on his former company’s “pre-mortem overview.”

“I didn’t steal funds, and I certainly didn’t stash billions away,” wrote Bankman-Fried, who is facing eight criminal charges by the U.S. Department of Justice.

“It’s ridiculous that FTX US users haven’t been made whole and gotten their funds back yet,” he continued, claiming that this new post dealt with FTX International’s insolvency and not about FTX US, which he said “is fully solvent and always has been.”

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