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SOFIA (Reuters) – Bulgarian prosecutors have launched an investigation into alleged illegal activities by crypto lender Nexo and have raided more than 15 sites in the capital Sofia, the prosecutor said on Thursday.
The announcement comes after Nexo announced in December that it would be phasing out U.S. products and services over the next few months due to clashes with regulators.
“Aggressive action is being taken in Sofia as part of a pre-trial investigation aimed at neutralizing the illegal criminal activities of cryptocurrency lender Nexo,” prosecutor’s spokeswoman Siyka Mileva told reporters. told the group.
“It has been established that the main organizers of the international platform are Bulgarian citizens and the main activities are from the Bulgarian territory,” she said.
More than 300 investigators, police officers and security guards were involved in the operation, Mileva said. They investigate the formation of organized crime groups, tax crimes, money laundering, unlicensed banking, and computer fraud.
Prosecutors said Nexo operated through a number of companies, many of which were simply “postboxes.”
A Nexo spokesperson told Reuters in an email that Bulgarian authorities were in one of its offices, but said that Nexo “only has functions related to operating costs such as payroll, customer support and back office. ‘ said.
A crypto lender functions like a bank in the crypto world, providing interest in the crypto that customers deposit on their platform.
According to Bulgarian prosecutors, $94 billion has passed through the Nexo platform in the past five years.
They also said they had established that a person officially found to have funded terrorist activities had used the platform to transfer cryptocurrencies, but did not elaborate.
Following the collapse of major exchange FTX last year, lawmakers around the world have stepped up their calls for regulation of cryptocurrency companies.
These companies grew quickly during the COVID-19 pandemic, but the downturn in the cryptocurrency market last year saw various cryptocurrency lenders freeze withdrawals and customers suffered heavy losses. Major US-based lenders, Celsius, Voyager Digital Ltd and BlockFi all filed for bankruptcy last year.
Reported by Tsvetelia Tsolova, written by Alan Charlish. Edited by Jane Merriman and Jason Neely
Our standards: Thomson Reuters Trust Principles.
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